Distressed Properties Identification and Revitalization Grant

Last night I spoke at the Lowell City Council meeting to urge the city of Lowell to apply for the Distressed Properties Identification and Revitalization Grant recently offered by Massachusetts Attorney General Martha Coakley. The purpose of this grant is to fund a position with Gateway Cities (such as Lowell) which would be devoted to addressing distressed properties within the city and speeding their return to productive use. Funding for the grant comes from the nationwide settlement recently entered into by various attorneys general (including Martha Coakley) that resolved litigation with five major national lenders for abusive mortgage and foreclosure practices. Here are the remarks I gave last night:

Thank you for this opportunity to speak. I’d like to provide some background to the Distressed Properties Identification and Revitalization Grant from the office of Attorney General Martha Coakley. Reckless lending practices by major national banks were a prime factor the worldwide real estate market collapse of five years ago. These same national banks made the crisis worse through the use of ineffective and sometimes unlawful foreclosure practices. Last year Attorney General Coakley entered into a nationwide financial settlement with these lenders. Because the abusive practices of these lenders had a direct impact on local land records, Attorney General Coakley and her staff have collaborated with the state’s registers of deeds to determine how some of the proceeds of the settlement might be used to rectify some of the harm that was done. Recognizing that just a handful of troubled properties can drag down real estate values in an entire community, my colleagues and I recommended that the money be used to provide grants to Gateway Cities such as Lowell that were hit hardest by the foreclosure crisis. These grants would be used by these municipalities to hire a person dedicated to attacking these troubled properties and getting them back into productive use. Now throughout this foreclosure crisis I’ve worked closely with many city offices and I know that Lowell is in better shape than most when it comes to dealing with these types of properties but there are still many troubled properties out there. The real estate market has not recovered; it’s just not as bad as it was. By taking advantage of this grant, the city of Lowell will have more resources to devote to remediating troubled properties and as a consequence, will accelerate the recovery of the local real estate market which will benefit everyone.

As the Attorney General's website makes clear, the deadline for applying for the grant is June 13, 2013 with the award to be made on August 1, 2013.

Realistic View of Housing Market in Globe

An op-ed in today's Globe by Paul McMorrow, an associate editor at Commonwealth Magazine, provides a keen assessment of the state of housing in Massachusetts today. Contrary to all of the glowing reports of a vibrant housing recovery in the mainstream media, real estate continues to be sluggish. McMorrow concurs, describing the current state as "less bad news masquerading as good news." He acknowledges that in certain communities, housing is booming but in most of the Commonwealth's cities and towns, particularly those hit hardest by foreclosures, the recovery is lagging. McMorrow does agree that new foreclosures have dropped substantially but he attributes this not to an overall recovery of housing but to the positive consequences of a series of foreclosure-related statutes enacted by the state legislature last year. All amendments to Chapter 244 (Foreclosures), these new laws imposed a number of requirements on lenders prior to foreclosing. Most significant, perhaps, was an obligation on lenders to consider mortgage modifications before foreclosing. Our own statistics here at Middlesex North tend to corroborate this drop in foreclosures. From January through April of 2012, for instance, there were 75 foreclosure deeds recorded for property in Lowell. For the same four months this year, that number dropped to 28. Along with a reduction in foreclosures, I suspect this new law has increased the number of short sales that are occurring. The term "short sale" describes a situation in which the seller owes more money on the mortgage than the house is worth, but the lender acknowledges this and agrees to release the mortgage upon payment of less than the full principal owed at the time of the sale to a third party. A review of home sales in Lowell during April discloses that many of the sales were made by homeowners whose initial mortgage amount exceeded the sales price of the property. While that is not absolute proof that a short sale has occurred, it's a pretty good indicator of one. Short sales aren't great for the market, but they're much better than foreclosures, so this is a positive development.

Website problems

Something is wrong with the Middlesex North portion of the MassLandRecords website. While we can access the site, the appearance of the content is distorted and it is not functioning as it should be. What's weird is that the same problem is not evident on any of the other registry sites on MassLandRecords. The tech support people are working on this but don't yet seem to know what is causing it. I'll update when there are further developments. UPDATE: As of 1130 am, the Middlesex North portion of the MassLandRecords website seems to be working OK, at least on our web-enabled computers here at the registry.

Major Upgrade to Google Maps

I'm anxiously awaiting the arrival of my invitation to join the new Google Maps application. Reading about it in yesterday's New York Times, I learned that this new version is the most radical redesign in the application's eight years of existence. Now, everyone's map will be unique and will be uniquely rendered each time you open the application. As the Times reporter observed, this new feature "hovers over the line between useful and creepy." It seems that sometime recently Google altered its terms of service. That's the boilerplate language to which we all click "I agree" even though we don't read it. This change gave Google permission to incorporate our searches, emails and all of our other information into the mapping application. Let's say I recently searched for "coffee shops in Lowell." With the new app, when I display a map of Lowell, all of the city's coffee shops will be highlighted. Ads for some, including ready-to-use coupons will also display. If I travel to Worcester and consult a Google map to aid navigation, coffee shops in that city will display. Like the reader said, "useful and creepy." In the registry of deeds' world here in the Commonwealth, much of our planning for the future involves a greater use of mapping technology. We envision all real estate related information - ownership documents, subdivision plans, assessor records, etc - to be tied to that point on a map. One thing driving both Google and us is the transformation of the world's information technology culture from desktops to mobile devices. As the name states explicitly, a mobile device moves around and knowing where you are is critical. The new Google Maps application is not yet publicly available. To use it, you have to ask for an invitation. I've just done that. As soon as I get my response, I'll do a follow-up blog post.

Mid-month recording statistics

May is half over so here are the statistics for the first two weeks of the month compared to the same period last year. The number of deeds recorded was up 34%, rising from 216 in the first two weeks of May 2012 to 289 in the first two weeks of May 2013. Mortgages were down 4%, sliding from 559 to 535 for the same two periods. Foreclosure deeds were down - I think this math is correct - 940%, plunging from 16 to just 1. Orders of notice were down 52%, dropping from 27 to 13. Total documents recorded was up just 2%, rising from 2605 to 2649.

More statistics: 2012 vs 2013

Are things getting better with real estate? That's a question I'm often asked these days so I'm constantly looking for new evidence to use in forming an opinion on the topic. Today I checked our volume of recording and our revenue collection for the first four month of 2013 and compared those figures to the same items in 2012. From January thru April 2013, we recorded 23,310 documents, an increase of 10% from the 21,203 recorded during the same period in 2012. Our revenue collected from all sources was also up in 2013. From January thru April 2013, we took in $3,888,487 from all sources. For the same months in 2012, the amount was $3,595,624. That's an increase of 8%. The amount of those totals collected as deeds excise tax showed no such growth. During the first four months of 2013, we took in deeds excise tax of $1,450,882. In 2012, that figure was $1,440,290. That's an increase of just 0.07%. Because the excise tax collected is based on the purchase price of property and because the number of deeds recorded in 2013 was 21% higher than the amount recorded in 2012 (2009 in 2013; 1656 in 2012), it would seem that prices went down. The one caveat is that many of the deeds recorded, perhaps as many as half, are related-party transfers that incur no tax. If there are more of these "no consideration" deeds recorded, it would throw off other calculations.

Document recording methods

I've written frequently about the volume of electronic recording we're processing this year. Thus far in 2013, documents sent to us electronically have averaged 40% of all recordings. But what percentage of documents come to us through the US Mail and by courier services such as Fedex and UPS? Our standard procedure is to annotate any document that comes to us in the mail with a small letter "M" written in the upper right corner. Electronically recorded documents have a very distinctive cover sheet. By counting all of the M's and all of the efile coversheets, we can determine how many documents were recorded by each of those methods. All the rest were recorded by walk-in customers. To get a sense of the breakdown between the three methods of recording, I reviewed all documents recorded from Monday, May 6 though Friday, May 10. During that five day period, we recorded a total of 1119 documents. Of those 462 (41%) were recorded electronically; 409 (37%) were recorded by walk-in customers; and 248 (22%) came through the mail.