WORD: Closing Protection Coverage

And the WORD for Today Is:

Closing Protection Coverage – is a well-kept secret which relates to a closing on a local real estate transaction. Unlike the title policy which pertains to the title of the property, closing protection coverage pertains to the handling of the funds and documents by the closing agent. Closing protection coverage covers losses due to the mishandling of funds or documents by the authorized closing agent. If a borrower chooses to purchase closing protection coverage, then they have coverage against loss of settlement funds resulting from any of the following acts of the licensed agent or anyone acting on behalf of the licensed agent, subject to restrictions or exclusions identified in the coverage:

1. Theft fraud, misappropriation or any other failure to properly disburse settlement, closing or escrow funds;
   
   
2. Failure to comply with any applicable written closing instructions, when agreed to by the licensed agent. (See closing agent).

You must be specifically named in the closing protection coverage form in order to be protected. A copy of this form is available to you, upon request.

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You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

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