On a practical note, if you are providing a chain of title, why not just disclose the matters of record in chronological order and leave it to the title company or end-user to determine legal effect?
Our client base is very diverse and ranges from historical societies seeking old property research, to lawyers seeking public records matters, to private detectives searching for school fraud, to undeveloped land owners seeking well permits, to city planning offices seeking title for mapping artifiacts, to surveyors seeking mapping records for monuments, to auction investors seeking lien priority on distressed lots.
In each case, except the last, our reports are a consistent product which go into explicit details of the record matters, but do not draw legal conclusions as to effect. An added disclaimer on matters of equitable subrogation would do just fine by us, and we see little other market effect.
It seems that they could not implement retroactively, so any future use of this principle would necessarily involve a future change in state codes.
I suspect that the effect would be more pronounced intiailly in judicial foreclosure state, bu that the legal challenges in nonjudicial foreclosure states would follow shortly thereafter.
I doubt that judges will be happy that their orders and decrees are also placed in a subordinate position to some new lender that comes along and pays off an old loan. The lack of recon tracking by most title companies is important to this point, as it will be very difficult for the common man to understand payoff matters in the public record. Interesting.....
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