Brick Township, New Jersey – First American insured a refinancing first mortgage against this residence for $107,800. Weeks before funding the closing agent mailed a request for payoff information to the existing lender. There was no immediate reply. On the eve of closing a secretary called the lender and took down the following payoff demand:
	Anchors Aweigh: When this home was refinanced the owner saw his ship come in

"Per Audrey at Central File $44,591.81- payoff as of 7/27 - $14.57 per diem - (loan number) 50011200017." After closing the payoff check was sent with a request that the canceled mortgage be forwarded by return mail.

Months later First American was contacted by its insured lender. It seems the borrower had two mortgages with the prior lender, one against his home and another against his boat. When the payoff check was received the lender canceled the boat mortgage and apparently sent boat title documents to the borrower. The borrower made a few mortgage payments, then abruptly moved out of his house, abandoned his business(Richie's Fender Bender Repairs and Auto Sales), and sailed away on his free-and-clear boat (a 31-foot Bertram).

First American hired attorneys to sue for judicial foreclosure and a declaration of priority over the paid-off lender. The judge ruled for the prior lender citing insufficient evidence of fault.

First American paid $62,927 to satisfy the offending mortgage, plus legal expenses of $18,032. The borrower's whereabouts remain unknown.

Clearing existing mortgages and liens can be tricky. Read on.