In Columbus, Ohio we have been seeing an increasing number of issues that relate to real estate closing fraud and closing protection letters. Specifically, we are seeing more fraud occurring related to the money in real estate closing transactions.
To make sure that, if the agency is negligent in handling the financial piece of real estate transaction, there is underwriter’s insurance to protect the parties to the transaction. And we always advise our clients to get a closing protection letter from the company.
Q: What is a closing protection letter?
A closing protection letter started at a period of time where there were unwarranted fees charged and title companies were using customer funds inappropriately. Closing protection coverage basically says that, as the underwriters, we are going to guarantee these funds that you have placed for closing will be there when the real estate transaction closes.
It will assure you that this agency that is holding your funds will follow your instructions and if they fail to do so, the underwriter will stand behind you.
For bigger real estate transactions, we will actually write a letter of instruction to the agency and specifically tell the agency what to do with your money, and when all of these things are done, it will need to be verified by us.
Learn more about real estate in Columbus, Ohio.