On the bright side, it’s not the robo-signers this time. In Taos County, New Mexico, two “heirs” have filed warranty deeds laying claim to a combined 42,000 acres of land and calling the ownership of about 7,000 properties into question. The warranty deeds were filed in an effort to show the right to inherit ownership of the land because the filers are descended from the original owners. However, the validity of the deeds is in question because they “fall outside of what is traditionally considered the chain of title used to identify ownership.”
While the mess is sorted out, real estate has ground to a halt in Taos County. Sellers can’t sell; owners can’t refinance, and buyers are forced to put closings on hold. Every property affected by these warranty deeds now has a cloud on the title, and title companies will not insure the title because ownership of the property is in question.
Although New Mexico does not require title insurance, the insurance is required by nearly every mortgage lender in nearly every deal to insure that the property’s ownership is solid in the event that foreclosure is necessary.
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