Closing Protection Letters (CPLs) are permitted and available in Colorado to buyers, sellers, borrowers and lenders; and surprisingly at minimal ($25) or no additional costs. A CPL is issued by a title insurance underwriter that provides assurances and protections regarding their authorized title company/agent’s failure to comply with closing instructions and disbursement of funds to effectuate title; and against fraud, dishonesty or negligence of the issuing title company/ agent in the handling of funds or documents in connection with a real estate closing.
What is interesting and not known by many is that these CPLs are only issued when requested. For some unknown reason Colorado title companies, don’t see the need to openly promote the availability of CPLs to real estate professionals or consumers. On the other hand, most lenders know to request and obtain a CPL before they will ever fund a loan to a title company.
So, remember to ask your real estate professional when they order your title and closing services to request a CPL for you.
More protection is always better!