We are talking about cases where the mortgage was paid off in the past, but no release recorded, right?

In Virginia there is a simple procedure for petitioning the court to release the mortgage. It will cost a few hundred dollars, and you need to present evidence sufficient to convince the judge. But when it is done the mortgage is effectively released. Check to see if your state has such a process available.

Also in Virginia there is a statutory provision for the trustee on the deed of trust to unilaterally make a release of a deed of trust. I have never seen this done. A trustee is understandably reluctant to stick his neck out.

Also, it might be a good idea to check the bankruptcy case file of the lender. It may provide for a trustee or receiver or someone designated to make releases. Again, you will have to give them sufficient proof that the mortgage was paid off.

Recording affidavits and such will only work to "remove" the mortgage if there is a state statute that provides for that. After the fact, I don't think the "release by settlement agent" process works. I'm sure it doesn't in Virginia.

If you present your underwriter with satisfactory proof of payment (not just a self-serving affidavit) they might be willing to "insure over" the mortgage. This doesn't release the mortgage, but can allow your deal to go forward.