Many loan servicers are under the misimpression that the prohibition against dual tracking only applies to loan modifications. This is incorrect; it also applies to forbearance agreements, deeds in lieu of foreclosures and short sales.
In order to transfer ownership of a mortgage, the Promissory Note must be physically delivered - but sometimes, Notes get lost.
Prior to the “modern era” where mortgages were “securitized,” the original Note and Mortgage typically remained in the possession of the “local bank” that originated the loan, and the bank collected and retained the loan payments.
Title insurance is an indemnification contract, like many other types of insurance. Just as a life insurance policy does not ensure you will live forever, a title insurance policy does not guarantee that your title is valid, but merely provides the insured with compensation to offset the loss sustained as a result of title not being as insured.
Most mortgages contain an “acceleration clause,” which provides that the lender has the right to accelerate the entire balance of the mortgage in the event of an uncured default.