If a foreclosed former owner, or a foreclosed former lender to that owner, decides to make a claim against a newly insured owner whose title derives from a completed but defective-in-process foreclosure suit, does not the new title insurer have AT LEAST the duty to defend the newly insured owner?
Even if there is a valid defense, it still costs to undertake the defense, doesn't it?
Read the press releases very carefully for slippery language.
While it seems logical that a title insurer would have to defend a defective title, it doesn't make sense for a lender to pay court costs simply to find out that the buyer's title is valid because he or she acted in "Good Faith" when relying on the lenders flawed documentation.
Yes in that circumstance a title insurer would have an obligation to defend their insured, however they would look to the lender to defend their own foreclosure action, so there should be little exposure to the title insurer.