Let me start by saying, "I don't know." I think that the lender should work with the title company and provide information when they have it, but it would not surprise me if the loan officer really didn't understand the credit report. Especially if he is a mortgage broker. Does he really understand what items on a credit report are unsecured, and which may be liens on the property? He likely relies on the title commitment for that.
The other thing to consider is that the loan officer might not want to jeopardize his commission if he volunteers information. That seems a bit shady to me, but I'm sure it happens.
The bottom line is that if it was missed on the title search the searcher was probably negligent. So, the question then becomes was the loan officer also negligent in failing to bring it up to the title company? Either way, I don't think it would take the title company off the hook. The title company will still owe a contractual duty to the insured, in my opinion.
Things just don't work the way they used to. When will everybody learn that we are all on the same side here? We are all supposed to be working together to get things done right.
Best,
Robert A. Franco
SOURCE OF TITLE
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