Part One by Fletcher Wilcox, Grand Canyon Title Agency
When a buyer is going to buy a property they want to know they have legitimate title to the property. This is where title insurance come in.
The process for title insurance starts after an escrow officer receives a contract for a purchase transaction. The escrow officer will order a commitment for title insurance from their title department.
In preparing the commitment, a title examiner runs a chain of title — which is the history of ownership for that property. It will identify the deed that gives the current owner title to the property. The examiner will check to see if the deed was properly executed and review any recorded liens recorded such as a deed of trust.
For every deed of trust recorded, an examiner looks for something called a release and reconveyance of that deed of trust. If there is one, they know that the deed of trust has been paid off and released from the lien holder.
Fraudsters understand this process.
Fraudsters record fraudulent deeds in the chain of title, allegedly giving them ownership. They may also record false releases, making a property free and clear, and could attempt to sell off or put a new loan on the property, then take the proceeds and disappear.
In the 1880s, Arizona land baron James Reavis used false documents for personal gain. Reavis used forged documents to create a chain of title which gave him ownership to 18,500 square miles of land in Arizona and New Mexico, including part of Phoenix.
Reavus bilked people out of money by giving them quitclaim deeds to land he did not own. Eventually, he was found out and went to prison. Back then, Arizona did not have title insurance so everyone who gave Reavis money in exchange for a deed, lost out.
Today, if an owner obtained title insurance and later found out that there was a fraudulent deed in the chain of title, the owner can file a claim with the title insurance company.
(Bolded definitions here.)
Part Two by Adrian Fontes, Maricopa County Recorder
Given the limited circumstances under which a document can be rejected for recording, there have been situations when ‘bad actors’ submit fraudulent or forged records.
Therefore, the Maricopa County Recorder’s Office recommends that you proactively check records recorded with our office and those at the Assessor’s office:
- RECORDER website (scroll down to search by Last/First Name)
- ASSESSOR website (search by entering Owner Name or Address)
If you believe that any fraudulent documents have been recorded involving the ownership of your property, please contact your local law enforcement agency or the Arizona Attorney General’s Office.
More information about Financial Institution/Mortgage Fraud is available from the FBI.
The Maricopa County Recorder’s Office will do all it can by cooperating with law enforcement and on any investigation in the pursuit of justice.