CPLs and Bifurcated Transactions

ATG’s Closing Protection Letter (CPL) ordering and delivery system for Illinois and Indiana transactions presumes that the closing will be conducted by the same ATG title insurance agent as who created the title commitment and will issue the policies for the transaction. Many times, however, one title insurance agent issues the commitment and policy and another title insurance agent or a lender conducts the closing, or two title insurance agents issue policies. These are known as bifurcated transactions. To help ATG title insurance agents and their staff reduce confusion in these situations, the following is an explanation and some tips on how to handle the CPLs for a few common scenarios.

Two ATG Title Insurance Agents

Where one ATG title insurance agent issued the commitment and will issue both policies (issuing agent), and another person, who also happens to be an ATG title insurance agent, closes the transaction (closer), two ATG REsource® files may have been opened for the transaction: one for the commitment and policies, and another to generate the HUD-1 Settlement Statement.

  • Place the order for the CPLs using the REsource file number for the commitment and policies.
  • If the closer orders the CPLs, he or she may place the order via the ATG website, www.atgf.com. Once you enter the REsource file number for the commitment into the CPL order page, the rest of the information for the order form will auto-fill with the data contained in the REsource file. Review the information and make any changes, then click the Submit button to complete the CPL order.
  • The CPLs will be delivered to the REsource file for the commitment, so the issuing agent must then email the CPLs for buyer/borrower and seller to the closer for delivery to the parties at the closing table.
  • The closer remits a check for the CPL fees. That check may be delivered to the issuing agent to include with the Accounting Information Schedule and policies, or may be delivered directly to ATG. If delivered to ATG, send a cover letter with the file number for the commitment and policies and the file number for the Settlement Statement so that ATG’s Policy Records Department can match the funds to the CPLs.
  • Both the closer and the issuing agent must place a note in the Order Entry screen of REsource to identify the REsource file number for the other file.

ATG Title Insurance Agent and a Non-ATG Title Insurance Agent

ATG Issuing Agent

Sometimes you will issue a commitment and then find that the bank for the buyer will close the transaction. Occasionally, you may write the commitment and serve as attorney for the seller, but then find that the buyer and lender have selected another title insurance underwriter’s agent to write the loan policy, and that agent will close the transaction. In either of those situations, ATG does not issue CPLs. ATG only issues CPLs where there is an ATG commitment and policy and a closing conducted by ATG’s title insurance agent, an ATG staff person or an ATG independent closer. If the closing is to be conducted by someone other than an ATG title insurance agent, ATG staff person, or an ATG independent closer, then no CPLs will be issued by ATG.

  • When someone outside of ATG conducts the closing, then the issuing agent must select the closer in the Order Entry screen in REsource as “89999 3d Party Remove CPL.” This selection tells ATG’s Policy Records Department not to bill your office for CPLs, and will reduce the number of problem files in your next audit.

ATG Title Insurance Agent Conducting a Closing with No ATG Title Insurance

ATG does not issue CPLs for any transactions where ATG is not insuring title. Thus, if an ATG title insurance agent closes a transaction without writing title insurance, then ATG will not issue CPLs.

  • In those situations, what authority does an attorney have to conduct a closing? Under Section 3(9) of the Title Insurance Act, attorneys, when acting within an attorney-client relationship, may conduct closings. 215 ILCS 155/3(9). ATG will not issue CPLs where you close as attorney for a party and there is no ATG commitment and policy.
  • If you close a transaction where there are no ATG CPLs, you may not use a HUD-1 Settlement Statement with ATG’s name on it, or prepare any other closing documents with ATG’s name on them.

Another Title Insurance Underwriter’s Commitment

If a different title insurance underwriter has issued a commitment for the transaction and an ATG title insurance agent is asked to close the transaction, then ATG will only issue CPLs if there is an ATG commitment issued. For example:

  • If First American has a title insurance commitment on a transaction, and then the title is bifurcated because the lender obtains an ATG title commitment, then ATG will issue CPLs for an ATG title insurance agent who closes.
  • However, if the title commitment is solely written by First American, then ATG will not issue the CPLs and the ATG title insurance agent must do one of the following: (1) close as attorney for one of the parties; or (2) obtain First American CPLs; or (3) not close the transaction at all.

Notes for All Transactions

  • Please remember to place notes in the CPL order form whenever you have an unusual situation with your CPL order. This will help the CPL Department to issue the proper CPLs.
  • Please remember to select the closer in the Order Entry screen in REsource, especially where it is closed by someone unrelated to ATG.
  • Please use the Notes section in Order Entry in REsource to note unusual situations, for the benefit of all ATG staff members who may help with your file.

If you have questions, please contact ATG’s Underwriting Department.

Posted on: Wed, 06/20/2012 - 12:00am