The insured lender's mortgage was in default. When the insured lender tried to obtain possession of the property to enforce its security, the insured discovered that the property was being occupied by a business pursuant to a long-term agreement of purchase and sale with the borrower. It appeared that the borrower was occupying the property pursuant to a life interest. The beneficiaries of the life interest challenged the validity of the insured mortgage on the basis that the life interest was relinquished to them, and that the borrower did not have authority to mortgage the property.
