I think you have to look at the damages incurred by the property owner in order to understand the nature of the claim. In the case of your house painter scenario your damages are pretty much limited to labor and paint. In the case of an open mortgage the marketability of the title to his property is impaired by the amount of the open mortgage. This is one of the risks an abstractor assumes when he/she performs a title search. Consequently, he should price his search accordingly, and not allow the VM's to dictate price to him.

Fortunately in many cases of an open mortgage it is simply a matter of a release never having been recorded for a satisfied mortgage.  Usually, problems with unsatisfied mortgages are caught before the closing because the closing attorney's have copies of pay off letters from the mortgagees. However, in those instances where there is an unstatisfied mortgage within the scope of the chain of title, the abstractor is liable if he/she fails to note it in the abstract. Like it or not, this is what you signed up for.