Yesterday, I received a panic call from a consumer whose title we insured in 2005. She was refinancing and her mortgage lender was using an attorney to issue the new loan policy. The attorney, rather than calling me himself, told her that we had missed a lien in bankruptcy and that her title was not clear.
I took at quick peek at the title and saw that the deed coming out of the bankruptcy was from the bankruptcy trustee and that it was pursuant to a court order in which the judge had ordered that the property could be sold free and clear of all liens and encumbrances.
I was unable to reach the law office as they weren't answering their phone during business hours. My insured consumer did confirm the number for me.
I explained the situation to my insured consumer and assured her that the attorney simply must not have read the bankruptcy docket or the deed. I immediately e-mailed a copy of the deed to her so she would have something concrete to show the attorney who was so very unavailable.
Sometimes people do make mistakes and miss things. That's human. In this case it appears that the search must have been conducted by someone who was not thorough or perhaps, simply ignorant. Even if he had missed the recital in the deed, I would think that having decided that a lien in bankruptcy was a problem that he would have read the entirety of the bankruptcy docket before contacting and scaring the consumer. Yoi.
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