Well, I can't say that I agree with either of you.  George's scenario may present a very gross exaggeration, but I don't think things quite work the way you describe them anymore either, Kevin.  I think ten years ago, I would have agreed with you wholeheartedly.  However, I just read an interesting case, MidFirst Bank v. Abney, 365 Ill. App. 3d 636, where a property was foreclosed on, the buyer at the sheriff's sale sold it, with title insurance, and then a previous lender that was not included in the foreclosure filed another foreclosure.  It was a very interesting case.  The buyer sued the seller, who acquired the property from the first sheriffs sale, for breach of warranty, even though he was aware of the prior mortgage and had made some of the payments on the missed mortgage.  The court held that actual notice did not prevent the breach of warranty claim. 

I have seen many law firms rely on current owner searches for their foreclosure actions, especially lately.  I think their logic is that the mortgage they are foreclosing on was insured so they really don't need to do a full search. However, with the quality of work that gets done these days, I think that is a false assumption.  Between the degrading title standards promulgated by the underwriters, and the inexperienced abstractors, there are many title problems that may still go undetected. Afterall, if it gets missed on one transfer... it doesn't matter how many current owner searches get done, it's not going to get fixed.

So... there may be a bit of truth in George's gloomy prediction, though still quite far fetched. 

Best,
Robert A. Franco
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