Legal Closing Protection Letter

Legal Closing Protection Letter

Date:   Title Company/Issuer:   File/Reference No.:

Beneficiary/Lender:   Loan No.:

Property:

RECITALS

WHEREAS, Issuer is authorized to issue title insurance commitments and policies and to appoint title agents to conduct closings and escrow services; and

WHEREAS, Beneficiary has requested protection in connection with the closing of the above-referenced transaction to ensure that settlement funds will be disbursed in accordance with the instructions approved by Beneficiary and that the Closing Agent acts in conformance with the Issuer's written closing instructions; and

WHEREAS, Issuer is willing to extend certain protections to Beneficiary subject to the terms, conditions and limitations set forth herein.

NOW, THEREFORE

For and in consideration of the mutual covenants contained in this Closing Protection Letter and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Issuer and Beneficiary agree as follows:

1. DEFINITIONS

For purposes of this letter, the following terms shall have the meanings set forth below:

a) "Closing Agent" means the title agent, escrow agent or settlement agent designated by Issuer to conduct the closing; Closing Agent name:

b) "Protected Party" means Beneficiary and its successors and assigns.

2. SCOPE OF PROTECTION

Subject to the provisions of this letter, Issuer agrees to protect Beneficiary against actual loss, damage or expense (including reasonable attorneys' fees and costs) caused by any breach of Issuer's written closing instructions by the Closing Agent that results in any of the following: (i) failure of the Closing Agent to comply with Beneficiary's written disbursement instructions; (ii) misapplication or conversion of funds delivered to the Closing Agent for closing; or (iii) failure to deliver to Beneficiary properly executed mortgage, deed of trust, security instruments, assignments or other documents intended for recordation to secure the mortgage loan.

3. EXCLUSIONS AND LIMITATIONS

The protections provided by Issuer do not apply to loss or liability arising from: (a) Beneficiary's failure to provide timely, accurate or complete written instructions; (b) acts or omissions of parties other than the Closing Agent; (c) losses resulting from decisions made by Beneficiary after receipt of material facts known to Beneficiary; (d) negligence, fraud or misconduct by Beneficiary; or (e) any indirect, special, consequential or punitive damages. Issuer's aggregate liability under this letter shall not exceed the lesser of the amount of funds misapplied at closing or the face amount of the mortgage loan secured by the Property.

4. CONDITIONS PRECEDENT

Issuer's obligation under this letter is conditioned upon: (a) Beneficiary providing Issuer with complete and accurate written closing and disbursement instructions at least days prior to closing; (b) Beneficiary delivering written notice to Issuer of any asserted loss within days after discovery of the asserted loss; and (c) Beneficiary cooperating reasonably with Issuer in any investigation or claim resolution.

5. CLAIMS PROCEDURE

Beneficiary must give Issuer written notice describing the alleged breach, the amount claimed and all relevant facts and supporting documentation to the Issuer's attention at the Notices address provided below. Issuer shall have the right to investigate, defend, compromise or settle any claim at Issuer's sole election. Issuer shall not be liable for any settlement entered into by Beneficiary without Issuer's prior written consent.

6. REPRESENTATIONS

Issuer represents that the person executing this letter on its behalf is authorized to do so and that this letter is a valid and binding obligation enforceable against Issuer in accordance with its terms. Beneficiary represents that it has authority to request this protection and to bind itself to the terms and conditions set forth herein.

7. INDEMNITY AND SUBROGATION

To the extent Issuer pays any loss under this letter, Issuer shall be subrogated to Beneficiary's rights against any person responsible for such loss. Beneficiary shall execute such instruments as Issuer reasonably requests to evidence or enforce such subrogation rights.

8. COSTS AND ATTORNEYS' FEES

If either party institutes proceedings to enforce this letter, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs as determined by the court or arbitration panel, unless otherwise prohibited by applicable law.

9. NOTICES

All notices, requests and other communications required or permitted under this letter shall be in writing and delivered by hand, certified mail (return receipt requested), nationally recognized overnight courier or email (with confirmation) to the addresses set forth below or to such other address as either party designates by written notice.

10. GOVERNING LAW

This Closing Protection Letter shall be governed by and construed in accordance with the laws of the State of without regard to its conflicts of law principles.

11. ENTIRE AGREEMENT; AMENDMENT; SEVERABILITY

This letter constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written understandings. This letter may be amended or modified only by a written instrument signed by both parties. If any provision of this letter is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

12. WAIVER; COUNTERPARTS

No waiver by any party of any right under this letter shall be effective unless in writing signed by the party waiving such right. This letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

ADDITIONAL INFORMATION

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