Fair? No. Legal? Yes. I am not aware of any legal remedy available to you. There is no law requiring mortgage companies to promptly foreclose and the problem you describe is fairly common.
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The real problem is that the attorney does not have a duty to you to record the deed. The attorney has a duty to his client and his client could sue for any damages due to his slow recording.
As for your situation, I don't know of a remedy unless you had an agreement and this was a breach of the agreement. (To be clear, I have never seen such an agreement that would allow you to sue under this kind of theory - but it could exist).
If you live in Arizona, please contact me for actual advice; this is just speculation. It certainly is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a idea of what you might do and how it may turn out.
I don't know of a legal cause of action that can be brought in your situation. However, I wonder what the date on the deed itself is. If the deed is dated approximately 18 months ago, perhaps the underwriters for your new loan will understand the facts better and still approve you. The deed should have a date on it when it was signed and that date is sometimes different than the recording date.