Welcome
Many of us have probably been involved in something like this without even knowing it. Unless the client brings it to your attention, why would you have reason to know there was a possible or imminent foreclosure? In my case, this would only come up when doing a significant subdivision, not a simple two or three tract split of a single parent tract. The major subdivisions which establish new identities for the new parcels (lot 6, block H, Murphy's Subdivision of a portion of......) require the County Treasurer to document if taxes have been paid. Only the title company issuing new policies for the "new" tracts would require clearing up of the mortgage problem. So, you see, it really doesn't matter if the property gets surveyed and split, it only matters when the mortgage defaulter attempts to sell, give away or donate said portion to another party.
> I work in 3 counties and only one requires the lien holder to sign off on the subdivision.
How do you subdivide something that you do not own?
If the municipality allows it, does that make it valid? I have read court cases about approved plats accepted by a county being declared invalid by a court...
> the client also had a Realestate agent tell her to do this
Maybe the plan is to follow the agent's advice, and then sue them and the surveyor and everyone else.
Well - first of all, if they can't pay the mortgage how can they afford to pay the surveyor?!