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#1481623 - 12/16/10 04:16 PM Closing Protection Letters, effective 1/1/11
manimal Offline
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This is from an IBA document:
"Escrow Agents and Closing Protection Letters
Public Act 96-1454 creates a statutory scheme for regulating escrow agents and the use of closing protection letters in real estate closings.... [Apparently] lenders can continue to negotiate their own terms in closing protection letters issued by title insurance companies."

We just recieved a notice from the Title company we use that listed their CPL charges, effective 1/1/11. Has anyone else received similar information? Their letter says the closing potection charges apply to "Resale or Refinance" transactions. This will show up on the HUD-1, so are their GFE implications then as well? This one slipped under the radar for me, so any insights as to how you are handling this would be very helpful. Thank you!
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#1484247 - 12/22/10 07:03 PM Re: Closing Protection Letters, effective 1/1/11 manimal
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I just heard the samething. The title company told us it had to be disclosed on the GFE.

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#1484285 - 12/22/10 07:40 PM Re: Closing Protection Letters, effective 1/1/11 AFS
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Is this fee charged for all title commitments or only when the closing is done at the title company? We do not close many of our commercial loans at the title company, so do we still have to pay this fee?
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#1484312 - 12/22/10 07:59 PM Re: Closing Protection Letters, effective 1/1/11 manimal
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Not sure ... Anyone else have any info on this?



As a result, effective January 1, 2011, Closing Protection Letters must be issued to Lenders, Borrowers, Buyers and Sellers for all residential real estate transactions, and non-residential transactions under $2,000,000.

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#1484367 - 12/22/10 08:58 PM Re: Closing Protection Letters, effective 1/1/11 manimal
MyBrainHurts Offline
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Originally Posted By: manimal82
Is this fee charged for all title commitments or only when the closing is done at the title company? We do not close many of our commercial loans at the title company, so do we still have to pay this fee?


I'm no authority on this, as all I know comes from reading 215 ILCS 155/16 and 16.1. However, the law appears to apply only to closing where a local title agency acts as escrow closing agent on behalf of the title company that issues the commitment. It is important to distinguish between the title company and the title agency. The title company, for example, Chicago Title or First American issues a commitment, and it is that company that charges the fee and issues the CPL. The title agency, for example, Hometown Title Service or The New Title Agency on the Corner, is acting as agent for the Company, and there is all sorts of ways they can screw up the closing. The CPL protects the seller, buyer and bank against these errors, but limits the damages to the amount on deposit with the escrow agent for the closing.

The local agency cannot charge a fee, nor split the fee with the company. The fee comes from the company that actually will issue the policy.

If there is no escrow closing, then there should be no fee. But some banks call "closing" having the customer come in and sign, then they still send everything to the title company to record, and rely on an instruction letter to the agency, and the agency's assurances, before disbursing funds. I don't know about these "in between" situation.
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#1484782 - 12/23/10 06:02 PM Re: Closing Protection Letters, effective 1/1/11 MyBrainHurts
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Thanks for your insight KFitz. I think a simple phone call to our title company would help us find the answers we are looking for... Have a nice holiday!
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#1491084 - 01/06/11 09:24 PM Re: Closing Protection Letters, effective 1/1/11 manimal
deh Offline
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We are using the fee as a FC but what are the rest of you doing regarding the fee for lender? Passing it on to the borrower? Can we?

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#1491274 - 01/07/11 02:00 PM Re: Closing Protection Letters, effective 1/1/11 deh
MyBrainHurts Offline
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We are passing it on to the borrower.
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#1498497 - 01/21/11 05:00 PM Re: Closing Protection Letters, effective 1/1/11 MyBrainHurts
xerx Offline
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So, I feel a step behind. I just noticed this new line item on the HUD today for an REO property I am selling.

This link shows that 50 Ill. Adm. Code 8100.2402 may actually require minimum fees (still pending?): http://www.chicagocommercialcenter.com/D...27154041734.PDF

However, the IL website does not show this requirement yet: http://www.ilga.gov/commission/jcar/admincode/050/050081000I24020R.html

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#1498881 - 01/21/11 10:08 PM Re: Closing Protection Letters, effective 1/1/11 xerx
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To the best of my knowledge, the IDFPR rule on minimum fees is still not final, but the title insurance industry has adopted the rule as a standard.
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#1528423 - 03/29/11 07:21 PM Re: Closing Protection Letters, effective 1/1/11 MyBrainHurts
shariAF Offline
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we new about the CPL fees that now need to be disclosed. we used the title company as our closing agent. i disclosed the CPL fees on my GFE as part as title services. since this was a foreclosure i was unsure what fees the borrower would actually end up paying so i disclosed the buyer, seller, lender fee on the GFE as borrower paid. when we went to closing i asked them to offset the fee on page 1 of the HUD and leave the fee in the borrowers column on page 2. they REFUSED. so now my 3rd page is not matching their HUD or fee columns for the buyer.

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#1529013 - 03/30/11 07:26 PM Re: Closing Protection Letters, effective 1/1/11 shariAF
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I'm confused.


shariAF - were you the lender?

Who refused?

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