Closing or settlement of a real estate and/or mortgage loan transaction can be characterized as having two components.  One component pertains to the title to the Premises and the title insurance policy.  The other component pertains to the handling of funds and documents.  A title insurance policy does not cover losses due to the mishandling of funds or documents.  However, Closing Protection Coverage, does provide such protection.

Title Insurance

There are two types of title insurance: Lender’s and Owner’s.

A Lender’s Policy insures that your mortgage to your lender is the first and best lien against the property you are buying.  This policy, however, does not protect your ownership interests in the property.

To protect yourself from errors in the title examination and from “hidden defects” in your title to your residence, you must purchase an Owner’s Policy of Title Insurance (“Owner’s Policy”).  An Owner’s Policy, for example, will protect you if the title examiner misses a previously recorded mortgage on your property during the records search and later the lender who owns that mortgage attempts to enforce it against you.  The Owner’s Policy also protects you against hidden defects in your title to your property including, but not limited to, fraud, missing heirs to a probate that have an interest in your property, incorrect legal descriptions, unreported easements, incompetent prior owners, Medicaid liens, and other matters that could affect your ownership.

Closing Protection Letter

The Closing Protection Coverage indemnifies you against the 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 certain conditions and exclusions specified in the Closing Protection Coverage Form:

1. Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and
2. Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.

You are covered by a Closing Protection Coverage Form only if it is specifically purchased and addressed to you.   Your Lender may require Closing Protection purchased on its behalf. Closing Protection Letters are ONLY available when a Lender’s or Owner’s Policy of title insurance is purchased in conjuction with a real estate transaction.

When buying a house, title insurance and a closing protection letter will bring you peace of mind. Let All Points Title & Closing, Inc. of Hamilton, OH, arrange this documentation for you to avoid complications. This company has been helping new homeowners throughout Ohio protect their real estate investments for more than three decades. Their experience and in-depth knowledge results in reliable service you can count on. Request an appointment online or call (513) 863-7600.