If a mortgage loan has already funded but not recorded and Escrow is
holding disbursement of funds due to a Title issue, how long can they
hold back on payment. Also is it possible for the borrower to cancel
the loan and apply with another lender during this process?

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Clarification of Question by ok4now-ga on 27 Nov 2005 13:33 PST

My appology to the commentator, this is a Refinance not a Purchase.
Thank you very much for the information.

Payment will not need to be made until funds are disbursed. Most
likely the title issue will be corrected before the 1st payment of the
mortgage is due. The borrower can cancel the loan only if they decide
to purchase a new property.Using the title issue as a reason to get
out of the contract. The loan is not holding up the title issue, the
seller is. Therefore, switching lenders is not going to help.

The borrower can't cancel, unless there's a problem with they
paperwork and they are forced to re-sign the rescission paperwork. 
What's the recording being held up for?  You said there's a problem
with title...the title company will NOT release funds until their
title issue is squared away...otherwise it's on them...that's what
title insurance is for.  Clarify your question a bit more and I might
be able to help you.