Should you buy a Closing Protection letter?

Q: Should you buy Closing Protection?

A: If you have zero risk tolerance, then sure. The Closing Protection bond is your assurance that if the Settlement Agent makes a mistake NOT covered by Title Insurance OR runs off with your money, you will be made whole. The risk is minuscule but theoretically exists. Lenders always buy it. We do not nor do we recommend it. But note that we scrutinize the Settlement Statement for conformity with the contract, looking for errors and asking questions BEFORE signing anything. In our view the Closing Protection letter is like paying someone a second time to do the job we already hired them to do. 

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