Lyin' Eyes

Danbury, CT

When William purchased this home, he purchased an owner’s title insurance policy since it was only a modest increase in cost over the purchase price of the lenders title insurance policy.

A few months later, there was a claim. It seems the seller had encumbered the property with two mortgages, only one of which was discovered by the title examiner in searching the county land records. As a result, the undiscovered mortgage was not satisfied through closing, and the lender now threatened to foreclose.

What happened? The sellers’ last name was “Taouil.” When this mortgage was originally submitted for recording, a clerk mis-read the name as “Taquil,” and so mis-indexed the mortgage in the county register of deeds office in the “grantor” index.

In searching the records, the title agent failed to “find” the mortgage—and the seller failed to mention it. After closing, the seller moved to Florida and later filed bankruptcy. The title policy paid $53,772 for a release of the missed mortgage.

MORAL

Title insurance gives valuable protection against risk of mis-indexed or ambiguous documents affecting property.