With the recent work done to repeal the construction defect law, I only foresee even more multi family properties being built in the future. 

Even if you 100% trust them, there may be latent defects unknown to them.

Borrower claims there was either a defect in the service of process or the trial court made an error finding in favor of the Plaintiff/lender. 

I would also look into any construction defects. 

Since she's already closed this escrow, we'd like to have the funds distributed ASAP and, if it becomes necessary, deal with the defective closing statement later. 

Custom mixed paint is not returnable unless it is defective.

Is the title attorney saying the underwriter won't issue a commitment until after the defect is cleared? 

A good inspector will walk you through the report and outline every single defect he found, but will not give pricing for repairs.

If there is a defect or dispute then there is no contractual relationship, and therefor no ability to pursue them for damages or a claim against their E&O or liability insurance.Same is somewhat true for appraisals.

I remove them immediately whether or not they are defective, and often leave the track to avoid drywall patching and painting.