Old unsatisfied mortgages, especially those with private individuals, drive me batty. On the one hand, if lots of time has passed and no foreclosure has taken place, some underwriters will instruct agents to simply insure over it. I've done that and been burned, not because of collection efforts by the mortgagee, but because the next attorney or title agent in the chain decides they want it fixed and won't take indemnification. That leaves me holding the bag. So I made a decision moving forward that I would insure over an old unsatisfied mortgage in the loan policy only. Owners have to take the exception. Interestingly, most owners don't want to take the exception. They don't want to get stuck with a fix either, so we either postpone for a fix or escrow.
I was called today by an attorney hired by a seller whose funds we are holding pending satisfaction of an old unsatisfied mortgage. The mortgagee was an individual now deceased. The attorney is having trouble with an heir and so chatted with First American - not the underwriter on this file - and they said they'd just insure over it. He wants to know if I'll rethink my position and insure over it.
Excuse me while I laugh.
Does he really think I'll buy into that proposal?