Property Fraud in Arizona Just Got More Attention
Property fraud can sound like something that happens to someone else. Until your name, your deed, or your home equity is involved.
In this Real Estate Tip Tuesday, Katie Halle Lambert, Associate Broker with Team EvoAZ at eXp Realty, and Ryan Gilliam with Your Best Mortgage discuss property and title fraud, where these problems can surface during a real estate transaction, and new protections Arizona homeowners should know about.
One of the biggest developments is Arizona's Early Real Estate Sales Alert System, a free and voluntary tool designed to help property owners identify a potentially unauthorized sale sooner. Arizona has also strengthened certain safeguards involving real estate documents and false property claims.
Where Title Fraud Can Cause Problems
From a lending perspective, two important questions during a purchase or refinance are whether the person involved actually owns the property and whether the new mortgage can be placed in the required lien position.
As Ryan explains in the episode, potential problems can include someone impersonating an owner, a forged deed, an unknown ownership interest, a fraudulent power of attorney, or questionable liens or claims involving the property.
These issues can also surface during a refinance. A homeowner might have owned a property for years without realizing that a fraudulent deed, lien, or ownership claim has been recorded.
That can become a significant problem when the homeowner wants to access their equity. Even when a borrower has strong credit, income, and equity, an unresolved title issue could prevent the title company from insuring the new mortgage and stop the loan from moving forward until the problem is addressed.
Why Title and Escrow Matter
Lenders and title companies have different roles in a transaction.
As Ryan describes it, the lender underwrites the borrower, including credit, income, assets, and the ability to repay the loan. The title company focuses on the property's ownership history.
That process can include searching public records, verifying ownership, identifying existing mortgages, liens, judgments, and other claims, and determining what needs to be cleared before the mortgage can be insured.
This creates an important additional layer of fraud protection during a purchase or refinance.
Arizona's Early Real Estate Sales Alert System
Arizona homeowners now have another tool available through the Arizona Department of Real Estate: the Early Real Estate Sales Alert System (ERAS).
The program is free and voluntary. Property owners can register a property and receive an email or SMS notification when an escrow officer submits a notice of a pending sale that matches information associated with the registration. If the owner believes the transaction is unauthorized, the alert provides a way to report it to the Department.
You can learn more or register here:
As Katie and Ryan emphasize, an alert system isn't foolproof. It is another tool homeowners can use to potentially learn about suspicious activity earlier, rather than discovering a title problem when they are trying to sell or refinance.
Maricopa County Homeowners Have Another Alert Option
The episode also points Arizona homeowners to a previous Real Estate Tip Tuesday covering the title alert system available through Maricopa County.
If you own property in Maricopa County, you can learn more about that resource here:
The Free Title Alert Every Maricopa County Arizona Homeowner Should Set Up:
https://www.youtube.com/live/JdW1y3tmyfU
Using available alert systems does not replace staying aware of what is happening with your property, but these tools can provide another opportunity to identify potential problems sooner.
Arizona Has Added New Deed Fraud Protections
Katie and Ryan also discuss SB 1479 and additional protections involving real estate documents.
Among the changes discussed in the episode are stronger identification and notarization safeguards and increased consequences for false property claims.
Arizona law now requires a notary public, with specified exceptions, to obtain a thumbprint or fingerprint in the notary's journal when notarizing certain documents affecting real property or a power of attorney. Arizona law also classifies knowingly recording a forged, groundless, materially false, or otherwise invalid property claim as a felony.
These safeguards add another layer of protection, but homeowners should still remain attentive to unexpected activity involving their property.
A Simple Step Arizona Homeowners Can Take
The takeaway from this Real Estate Tip Tuesday is simple: property fraud is worth paying attention to before it becomes a problem.
Arizona homeowners can register for the state's free Early Real Estate Sales Alert System, and Maricopa County homeowners can also explore the county-level title alert resource discussed in the previous episode.
Early notification may give a property owner an opportunity to investigate suspicious activity before discovering the issue during a sale or refinance.
Prefer to Watch Instead?
Want to hear Katie and Ryan explain how title fraud can affect a purchase or refinance and why Arizona's new alert system matters?
Watch the full Real Estate Tip Tuesday episode for their conversation and homeowner tips.
Have Questions About Buying or Selling a Home?
Team EvoAZ can help you navigate the real estate side of your purchase and understand the documents and deadlines that come with an Arizona home transaction.
Katie Halle Lambert | Team EvoAZ
Text ConnectWithKatie to 480-508-9828
Have Questions About Your Mortgage?
Whether you're purchasing your first home, refinancing, or simply have questions about your financing options, Ryan is here to help.
Ryan Gilliam | Your Best Mortgage
Text ConnectWithRyan to 480-508-9828
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Looking for homes in the Phoenix area? Text GetPhoenixDeals to 480-508-9828 to browse current listings and great opportunities.
〰️ Looking for homes in the Phoenix area? Text GetPhoenixDeals to 480-508-9828 to browse current listings and great opportunities.
Disclaimer: This video is prerecorded. The information provided in this video is for educational purposes only and not financial or legal advice. Always consult a licensed lender, real estate agent, or wealth manager for guidance specific to your situation.
