old mortgage was missed by title company
I bought a house last summer. Used attorney, title search was completed by local company (vanguard title), obtained title insurance for purchase price of $50k. I rehabbed house put $65k in to it and in the last week I was there December 2025, was notified there is a previous reverse mortgage on the house. After contacting title company, they said yes we missed it when doing the search. At that point they put me in touch with the title insurance company (chicago title). Still trying to get the mortgage balance so that is what we are waiting for right now . but title insurer says no matter what the balance, if it exceeds $50k they are only on the hook for $50k. I have been told I can go after the professional liability insurance of Vanguard, who did the initial title/abstract search. Is this correct?
being a reverse mortgage, i dont know the balance but im expected well over $100k
I bought the house from the stepson of the previous owner who has the mortage. Apparently he just did a quit claim deed to the stepson and I bought from stepson. Stepson has no assets to go after and the previous owner who had the reverse mortage has since died.
What a mess! Ill take any advice on what to do next!
Most Popular Reply
Hey @Dave Charron, that’s a tough situation.
The title insurance limit is typically capped at your policy amount, so what they’re telling you is standard. But yes, if the title company missed a recorded lien, you may have a claim against them through their errors and omissions insurance.
At this point, the most important move is to get a real estate attorney involved who has experience with title claims. They can push both the title insurer and the abstractor, and help determine whether the lien can be cleared, negotiated, or fully covered through a claim. You may end up recovering through a combination of title insurance and a claim against the title company, but you’ll want someone advocating for you on that.