Chain of Title Problems and Mortgage Approval in 2026: What Breaks a File and How to Fix It

A break in the chain of title occurs when the recorded history of property ownership contains a gap, a defective conveyance, or an undocumented transfer. Every lender requires a clear chain of title as a condition of closing. When the title company uncovers a defect, closing stops until it is cured or insured over -- and curing title defects can take days, weeks, or months depending on the nature of the problem.

Common Causes of Title Chain Breaks

• ✦Missing probate: a prior owner died and the property transferred without proper probate, leaving no deed to document the conveyance
• ✦Erroneous legal description: a prior deed contains an incorrect legal description that does not match tax records or surveys
• ✦Forged or fraudulent deed: a deed was recorded in the chain that was not executed by the actual owner
• ✦Unrecorded deed: a valid conveyance occurred but was never recorded, creating a gap in the public record
• ✦Sheriff's deed defects: tax sales or foreclosure deeds that were improperly executed or not served correctly on all parties of interest

How Title Companies Resolve Defects

Minor defects can often be resolved by the title company through a title affidavit, a corrective deed, or an heir's affidavit filed in the public record. More serious defects require a quiet title action, which is a court proceeding that adjudicates the ownership question. Quiet title actions typically take 3 to 6 months and can cost $3,000 to $10,000 in legal fees. The title company may offer to insure over certain defects rather than cure them if the risk of a future claim is low.

What MLOs Should Do

Order title early. On purchase transactions, a title search should be ordered within the first week of ratified contract. Defects discovered late kill timelines. On refinances, check for prior recorded liens including mechanics liens, PACE financing, and municipal code enforcement liens that may not appear on a preliminary title report. When a title defect is discovered, immediately loop in the title company, the attorney if applicable, and the lender's closing team to assess cure time.