He's going by what a lawyer would see it. I'm going by what a title insurance company would do (and required!!) He's not looking at it in the eyes of an insurer. I am because I'm an insurer. Each state has it's own criteria for posting judgments of public record. Once complied, the unsecured lien affects the real estate.
Suppose you are at a closing and you are the title company insuring the deal. The buyer and counsel walk outside to talk in private and your sitting there alone with the seller. All of a sudden, the seller speaks up and says "I'm so happy to be here and happy we don't have to deal with that pipe connected to the neighbors water well pipe". What do you do? Your obligated to tell once you confirm it's not noted.
Suppose a loan officer tells you he has a customer who wants to refinance the home because her husband is about go through criminal court for doing very bad things with his company. She needs money for his defense. What do you do? The borrowers has awesome credit, huge equity and perfect credit. Answer: you walk away completely. Never touch the deal.
There is a huge difference between receiving a title report compared to what's actually placed on the committment. What is found of public record versus what is "learned about" outside the realm of public data is sometimes combined on the final report. Examiners don't know this. Title readers or title officers know this. Yeah it's rare but in order to combat fraud, you better believe it that a final report will show more than what is actually found of public record no matter where you are in the states.
One last example...a previous title company fails to place their insured mortgage on public record. Your search shows free and clear. The new title company learns from the loan officer that the credit report shows a mortgage. The final committment will show that mortgage!! This is battling fraud. That previous title company not only committed fraud, they kept the mortgage tax (where applicable) and recording fees and possible the premiums (if the lender isn't awake to realize their file has no final policy). And yes, it is possible that previous title company made the mistake of not recording that mortgage and play stupid once caught. It's just a cover up.
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