This morning I want to great credit to UMass Lowell for its presentation of the play “The Rivalry” yesterday at the university’s Inn & Conference Center (the former Doubletree Hotel). “The Rivalry” is a re-enactment of the 1858 debates between Stephen Douglas and Abraham Lincoln in connection with that year’s U.S. Senate race. The Democrat Douglas was seeking re-election and was being challenged by the Republican Lincoln. Because Senators were elected by state legislatures and not directly by the people back then, Douglas and Lincoln were actually campaigning for members of their respective parties who were running for state senator and state representative.
Because the central issue being slavery, these six debates attracted nationwide coverage which caused Lincoln to become a national figure who was elected president in the 1860 election. In essence, Douglas advocated “popular sovereignty” for new states by which he meant the people of that state should decide whether it would be free or slave (which he saw as the only way to prevent the disintegration of the country into civil war). Lincoln said that slavery was an abomination and, while he did not advocate the forced elimination of it in places where it already existed, it should not be allowed to spread any further.
While I have attended many events at “the hotel” over the past twenty years, this was my first visit since its makeover as the UML ICC. This event - free to the public - was a great example of the potential that this facility has for enlivening life here in Lowell. The play was also a reminder that 2011 will be the 150th anniversary of the start of the American Civil War, an anniversary we’re sure to hear more about in the coming months.
Friday, October 30, 2009
Thursday, October 29, 2009
A surge in electronic recordings
Yesterday we established a new record for the number of electronic recordings processed. The previous high was 107 on April 13, 2009. Yesterday, we recorded 168 documents electronically. That group, which constituted 42% of our overall recordings for the day, included 120 discharges, 31 assignments, 1 deed, 9 mortgages, 1 certificate, 1 homestead and 5 orders of notice. We actually reviewed many more than the 168 that made it on record (for instance, at 8:30 a.m., there were 177 in the electronic pipeline), but we rejected quite a few with the most common reason being that the land involved was not in this registry district.
Unlike other registries, we do not use an electronic queuing system to control the order of recording of electronically submitted and carried-in documents. The reason we don’t have it was illustrated with our experience yesterday. With the current queuing systems, incoming electronic recordings are assigned a sequential number as are walk-in recordings and there is no way to bump someone at the back of the queue higher up in line. If we did have such a system in operation and a poor customer came in at 8:35 a.m. with a single document, he would have had to wait for nearly two hours until registry employees completed the review and recording of all the documents that arrived electronically. Without such a system, we had the flexibility to wait on that customer while other registry employees continued processing the electronically submitted documents, so everything got recorded within a reasonable amount of time.
Unlike other registries, we do not use an electronic queuing system to control the order of recording of electronically submitted and carried-in documents. The reason we don’t have it was illustrated with our experience yesterday. With the current queuing systems, incoming electronic recordings are assigned a sequential number as are walk-in recordings and there is no way to bump someone at the back of the queue higher up in line. If we did have such a system in operation and a poor customer came in at 8:35 a.m. with a single document, he would have had to wait for nearly two hours until registry employees completed the review and recording of all the documents that arrived electronically. Without such a system, we had the flexibility to wait on that customer while other registry employees continued processing the electronically submitted documents, so everything got recorded within a reasonable amount of time.
Wednesday, October 28, 2009
County Layout Plans now on computer
We just finished scanning our “county layout plans” which are plans that were prepared by the Middlesex County Engineering Department to show takings by the county for roads and other governmental functions. Most of these plans were created during the first half of the Twentieth Century, but registry customers often make use of them. Formerly, we had them rolled up in a closet and would produce them any time they were requested. Now that we’ve scanned them, they are available on the in-house public access computer system (it will be a while until we get them on the website). There is also a bit of a trick to displaying them, but that information is contained in the following paragraph:
At any one of our regular public access terminals, go to the Recorded Land search page and select the “document” tab at the top of the search box. In the “Book” window, enter 200 and in the “Plan” window enter 1. Click “search” and when a line of data appears, double click on it. That causes the pop-up plan viewing window to appear with the plan in plan book 200, page 1. (shown in above picture). Click in that Plan Book window, delete the “200” and enter the “town plan code” from the list below. If you’re looking for a county layout plan in Billerica, for example, you would enter 910. Leave the number 1 in the plan window. Then click the “Next Plan” button to the right of the viewer. If the first Billerica plan only contains one sheet, that sheet will immediately display. If there is more than one sheet (which is frequently the case), a series of numbers will appear in the “”sheets in plan” window. Click on each (usually they are numbered 0001, 0002, etc) to display.
These plans have never been numbered in a way we can duplicate on our computers, so for now you have to just click through each until you find the one you’re looking for. We are working on an index for all of these plans which would list the names of the streets shown on each plan plus the corresponding plan number within our system. Once that index is done, I’ll write about it here. In the meantime, please check out this new feature.
Tuesday, October 27, 2009
"The dog ate my mortgage"
A column in Sunday's New York Times explores the way that homeowners, aided by various courts across the country, are pushing back against foreclosing lenders. At the peak of the past real estate boom, I remember a busy attorney telling me that the entire financial system was geared to rapidly executing and recording mortgages so that they could be shipped off to Wall Street and repackaged for investors. The complaint was that the entire system was electronic and fast until it reached a standstill at the paper-based registry of deeds. It seems that our financial system never got in sync with our recording system, so now lenders commencing foreclosure proceedings often do not have the documentation necessary to show that they in fact hold the mortgage. Such was the case in a New York bankruptcy case. The end result? The judge ruled that the debt secured by the mortgage was void and unenforceable. While that is undoubtedly an extreme case, it is in some ways indicative of what is happening around the country.
Monday, October 26, 2009
CPA Funding in Trouble
The ecomomic slow down in Massachusetts is taking a toll on the state's Community Preservation Act. The CPA was enacted in 2000 and is a “tool to help communities preserve open space and historic sites, and create affordable housing and recreational facilities (CPA website)”. There are currently 135 Massachusetts communities participating in the CPA.
Here is how it works...Local funds are raised through a property tax surcharge of up to 3%. The state provides matching funds to cities and towns based on the amount of CPA funds it collects. The Commonwealth's matching funds come from a $20 per document surcharge at the registries of deeds. According to the Boston Globe the recent decrease in recordings at the registries will result in a 40% decrease in matching funds distributed by the Commonwealth in the upcoming year. The big problem is many participating communities initiated long range projects and/or acquisitions based on CPA funding and now find themselves expecting less dollars.
The Boston Globe gives examples of towns receiving less CPA funding this year…last year Waltham received $1.3 Million, this year it will received $729,000; last year Ashland received $524,000, this year it will receive $294,200.
And this directly from the Boston Globe:
Stuart Saginior, Executive Director of the Community Preservation Coalition, a nonprofit organization that provides technical assistance to communities adopting or implementing CPA, said the matching is projected to be as low as 28% next year. The current CPA legislation states that it can go down as low as 5%.
In an effort to keep the match from continuing downward, the coalition is supporting legislation filed by Democratic Senator Cynthia Stone Creem of Newton and Democratic Representative Stephen Kulik of Worthington that would raise the minimum match rate to 75%.
To support the legislation with additional funds, the bill would increase the CPA fee on real estate recordings instruments from $20 to $40.
Undoubtedly, users of the registries of deeds will be following the Creem/Kulik bill closely. If it passes the recording fees of most documents will increase by $20.
Friday, October 23, 2009
The registry's role in documenting first-time homebuyer credit
Officials from the IRS and Treasury Department recently testified before a Congressional subcommittee regarding the first time homebuyer credit program. We’ve written about this before, primarily in the context of the surge in recordings it is expected to bring to us at the end of November. For those unfamiliar with the program, taxpayers who have not owned a residence in the past three years are eligible for a tax credit of up to $8000 for a residence purchased no later than November 30, 2009. The credit is a refundable one, so taxpayers with little or no tax liability would receive their credit as a tax refund.
In its reporting on this committee hearing, the mainstream media has focused almost exclusively on testimony that quantified the number of questionable or fraudulent claims. For example, of the 1.5 million who have claimed the credit thus far, the validity of approximately 100,000 of those claims is in doubt. Two examples: 19,000 claimants had yet to purchase the home for which the claim was made (you have to have already closed on the property before claiming the refund) and 580 claimants were under the age of 18 which is the minimum age for participation in the program).
One thing that seems clear is that the claimant has actually purchased the property within the time allowed. The best proof of that, I assume, would be a copy of the recorded deed. So, if the IRS does implement new documentation requirements when claiming this credit, we here at the registry of deeds should see a sudden increase in the number of folks looking for a copy of their deed.
In its reporting on this committee hearing, the mainstream media has focused almost exclusively on testimony that quantified the number of questionable or fraudulent claims. For example, of the 1.5 million who have claimed the credit thus far, the validity of approximately 100,000 of those claims is in doubt. Two examples: 19,000 claimants had yet to purchase the home for which the claim was made (you have to have already closed on the property before claiming the refund) and 580 claimants were under the age of 18 which is the minimum age for participation in the program).
One thing that seems clear is that the claimant has actually purchased the property within the time allowed. The best proof of that, I assume, would be a copy of the recorded deed. So, if the IRS does implement new documentation requirements when claiming this credit, we here at the registry of deeds should see a sudden increase in the number of folks looking for a copy of their deed.
Thursday, October 22, 2009
"Do-over" foreclosures and tax liability
This week’s Banker & Tradesman (October 19, 2009) has extensive coverage of and reaction to Land Court Judge Keith Long’s recent affirmation of his earlier decision that foreclosing lenders must have had assignments of mortgages already in place from the beginning of the process for the foreclosure to be valid. There’s a related story about the effect this will have on registries of deeds which includes an interview with me. I told the reporter that besides bringing us a new wave of foreclosure deeds, the one unresolved issue was how to handle the excise tax on the second foreclosure deed.
Here’s the problem: Because of the speed and frequency with which the promissory notes secured by mortgages were transferred among lenders, Wall Street and investors, the system had difficulty recording assignments of those mortgages in a timely and accurate fashion. Consequently, when lenders commenced foreclosure proceedings, there often was not an assignment of that mortgage to that lender on record, but the lender went ahead with the foreclosure anyway with the expectation of cleaning up the record after the fact. Judge Long’s decision renders such a foreclosure invalid because, without the assignment in place at the beginning of the process, the lender had no standing to carry out the foreclosure. With the foreclosure invalidated, ownership of the property would revert back to the borrower, but once the lender was able to record all necessary assignments, the lender could start the foreclosure process over again.
At the registry, we’re frequently presented with documents titled “confirmatory” something or other. Those are used when the initial document contained some flaw that necessitated correction or clarification (such as a name or address being spelled wrong). In this foreclosure scenario, however, there is nothing to confirm since the initial foreclosure was void. The new foreclosure deed (the one from the foreclosure conducted after the assignments were properly put in place) therefore is an entirely new transaction and cannot relate back to the earlier foreclosure deed.
We at the registry are obliged to collect an excise tax based on the sales price of the property. When the first foreclosure deed was recorded, we would have charged the appropriate tax and a tax stamp in that amount would have been affixed to that document. But if that foreclosure deed is void, what happens to the tax liability? My understanding is that in such a case (where the deed was void and the money was refunded), there was no taxable transaction and therefore no tax liability. In such a case, the person who paid that tax would be entitled to apply for an abatement of that tax from the Department of Revenue (the registry has no mechanism to pay out a refund).
When the second foreclosure deed (the “do-over”) gets recorded, we must charge the tax and affix a new tax stamp to that document. Lenders have argued that since they only paid consideration once and have already paid the tax based on that consideration, they should not have to pay a second time.
As a practical matter, that’s true. That’s what I told the B&T reporter and that was what was written in the story. Unfortunately, I failed to make clear to the reporter that technically, the correct way to handle this was for the foreclosing lender to pay the full excise tax on the second foreclosure deed and then seek an abatement (aka a refund) for the first deed (which was void). Just yesterday I heard from one of my colleagues who had spoken with DOR which advised him to get the money for the second stamp and advise the customer to seek an abatement of the first payment. Supposedly, a written ruling should be forthcoming on this. In the meantime, I do think that we are obliged to charge the tax on the second foreclosure deed and that it is the customer’s responsibility to obtain a refund for the first payment from DOR.
Here’s the problem: Because of the speed and frequency with which the promissory notes secured by mortgages were transferred among lenders, Wall Street and investors, the system had difficulty recording assignments of those mortgages in a timely and accurate fashion. Consequently, when lenders commenced foreclosure proceedings, there often was not an assignment of that mortgage to that lender on record, but the lender went ahead with the foreclosure anyway with the expectation of cleaning up the record after the fact. Judge Long’s decision renders such a foreclosure invalid because, without the assignment in place at the beginning of the process, the lender had no standing to carry out the foreclosure. With the foreclosure invalidated, ownership of the property would revert back to the borrower, but once the lender was able to record all necessary assignments, the lender could start the foreclosure process over again.
At the registry, we’re frequently presented with documents titled “confirmatory” something or other. Those are used when the initial document contained some flaw that necessitated correction or clarification (such as a name or address being spelled wrong). In this foreclosure scenario, however, there is nothing to confirm since the initial foreclosure was void. The new foreclosure deed (the one from the foreclosure conducted after the assignments were properly put in place) therefore is an entirely new transaction and cannot relate back to the earlier foreclosure deed.
We at the registry are obliged to collect an excise tax based on the sales price of the property. When the first foreclosure deed was recorded, we would have charged the appropriate tax and a tax stamp in that amount would have been affixed to that document. But if that foreclosure deed is void, what happens to the tax liability? My understanding is that in such a case (where the deed was void and the money was refunded), there was no taxable transaction and therefore no tax liability. In such a case, the person who paid that tax would be entitled to apply for an abatement of that tax from the Department of Revenue (the registry has no mechanism to pay out a refund).
When the second foreclosure deed (the “do-over”) gets recorded, we must charge the tax and affix a new tax stamp to that document. Lenders have argued that since they only paid consideration once and have already paid the tax based on that consideration, they should not have to pay a second time.
As a practical matter, that’s true. That’s what I told the B&T reporter and that was what was written in the story. Unfortunately, I failed to make clear to the reporter that technically, the correct way to handle this was for the foreclosing lender to pay the full excise tax on the second foreclosure deed and then seek an abatement (aka a refund) for the first deed (which was void). Just yesterday I heard from one of my colleagues who had spoken with DOR which advised him to get the money for the second stamp and advise the customer to seek an abatement of the first payment. Supposedly, a written ruling should be forthcoming on this. In the meantime, I do think that we are obliged to charge the tax on the second foreclosure deed and that it is the customer’s responsibility to obtain a refund for the first payment from DOR.
Wednesday, October 21, 2009
Who is buying homes in Lowell?
While real estate is not exactly booming in Lowell these days, many homes are selling. That invites the question, who is it that’s buying them? Our records don’t easily answer that questions but with some analysis and a little effort we can draw a picture that should be fairly accurate. As a sample, I looked at sales in Lowell where the purchase price was more than $50,000 (foreclosures were not included in this set).
In January 2009 there were 63 such sales. Of that group, 23 (or 37%) involved banks selling to third parties after the bank had foreclosed on the property (and by “bank” I mean any lending institution including mortgage companies). Five more properties had banks as sellers but with no foreclosure in the property’s immediate past. This means that 28 of 63 (44%) of the properties sold in Lowell in January 2009 had a bank as the seller.
Since all Massachusetts deeds are supposed to include the mailing address of the buyer, we can look at the deed to determine where the buyer is from. In generally, if the buyer is moving into the house being purchased, that’s the address that’s listed, but if the buyer is an investor, another address is given. In the case of the 28 properties that were sold by banks, 13 of the buyers listed Lowell as their address; 8 listed somewhere other than Lowell; and 7 listed no mailing address. Applying that same test to all of the 63 properties sold that month, we find that 36 (57%) were purchased by buyers listing a Lowell mailing address; 19 (30%) by buyers listing a mailing address outside of Lowell; and 8 (13%) listed no mailing address.
In the coming days, we’ll collect this data for several other months in 2009 and try to draw a clearer picture of just who is purchasing homes in Lowell these days.
In January 2009 there were 63 such sales. Of that group, 23 (or 37%) involved banks selling to third parties after the bank had foreclosed on the property (and by “bank” I mean any lending institution including mortgage companies). Five more properties had banks as sellers but with no foreclosure in the property’s immediate past. This means that 28 of 63 (44%) of the properties sold in Lowell in January 2009 had a bank as the seller.
Since all Massachusetts deeds are supposed to include the mailing address of the buyer, we can look at the deed to determine where the buyer is from. In generally, if the buyer is moving into the house being purchased, that’s the address that’s listed, but if the buyer is an investor, another address is given. In the case of the 28 properties that were sold by banks, 13 of the buyers listed Lowell as their address; 8 listed somewhere other than Lowell; and 7 listed no mailing address. Applying that same test to all of the 63 properties sold that month, we find that 36 (57%) were purchased by buyers listing a Lowell mailing address; 19 (30%) by buyers listing a mailing address outside of Lowell; and 8 (13%) listed no mailing address.
In the coming days, we’ll collect this data for several other months in 2009 and try to draw a clearer picture of just who is purchasing homes in Lowell these days.
Tuesday, October 20, 2009
Rebel Droids
I thought the most famous Droids in the world were R2-D2 and C-3PO from Star Wars fame…but I guess I was wrong. Motorola, not SkyNet, is making the latest Droids to storm the world. Actually, Motorola’s Droid is a phone...but it is not just another cloned, smart phone. Droid is powered by Google’s Android Operating System and is being marketed by Verizon. If you watched the Patriots crush the Titans Sunday you probably saw Verizon's unorthodox commercial for its Droid.
Here's the text:
iDon’t have a real keyboard
iDon’t run simultaneous apps
iDon’t take 5-megapixel pictures
iDon’t customize
iDon’t run widgets
iDon’t allow open development
iDon’t take pictures in the dark
iDon’t have interchangeable batteries
Everything iDon’t
DroidDoes
When I first saw this commercial I was a little confused, but the lower-case “i” before the word "Don’t" indicated one thing for sure…The mission of Motorola’s Droid is to destroy the iPhone, not Darth Vadar. Like the lethal combination of Luke Skywalker, Hans Solo and Obi Wan the coalition of Google, Verizon and Motorola makes one powerful force that even Apple can't ignore. Experts (that’s not me) still believe that the Apple Empire will reign supreme until the rebels find a way to neutralize the company's real Master of the Digital Universe, iTunes!
Monday, October 19, 2009
Old Town Seals
Town Seals are fascinating to examine. They reflect both the history of a community and its goals. The video below contains the Seals of all ten towns in our Middlesex North District and several other interesting ones in other parts of Middlesex County.
Friday, October 16, 2009
"Commercially reasonable efforts to avoid foreclosure"
The Legislature’s Joint Committee on the Judiciary yesterday held a hearing on Senate Bill 1848, filed by Andover’s Susan Tucker and titled “An Act to Require Commercially Reasonable Efforts to Avoid Foreclosure. Senator Tucker and Attorney General Martha Coakley both testified in support of the bill.
The bill is directed at creditors and requires them, prior to initiating foreclosure proceedings, the determine whether the delinquent loan should be modified. The bill establishes a standard against which that decision may be measured: the creditor must “conduct an analysis comparing the net present value of the modified loan and the creditor’s anticipated net recovery that would result from foreclosure.” If the value of the modified loan exceeded the anticipated recovery at foreclosure (and if it is determined that the creditor is able to make the monthly payments on the modified loan), then the creditor must modify the loan. Only where the value expected to be received from foreclosure exceeds the value of the loan as modified may the creditor foreclose.
Additionally, this bill requires lenders to sign an affidavit in all foreclosures affirming that the lender is already in possession of a “written, signed and dated” assignment of the loan. This section relates to the Land Court decision we’ve written about frequently.
For at least a year, legislators and the Attorney General have requested lenders to work with creditors to modify loans and thereby reduce foreclosures, but these requests have been largely ignored. It looks like some in state government are now ready to make loan modifications mandatory under the right set of circumstances.
The bill is directed at creditors and requires them, prior to initiating foreclosure proceedings, the determine whether the delinquent loan should be modified. The bill establishes a standard against which that decision may be measured: the creditor must “conduct an analysis comparing the net present value of the modified loan and the creditor’s anticipated net recovery that would result from foreclosure.” If the value of the modified loan exceeded the anticipated recovery at foreclosure (and if it is determined that the creditor is able to make the monthly payments on the modified loan), then the creditor must modify the loan. Only where the value expected to be received from foreclosure exceeds the value of the loan as modified may the creditor foreclose.
Additionally, this bill requires lenders to sign an affidavit in all foreclosures affirming that the lender is already in possession of a “written, signed and dated” assignment of the loan. This section relates to the Land Court decision we’ve written about frequently.
For at least a year, legislators and the Attorney General have requested lenders to work with creditors to modify loans and thereby reduce foreclosures, but these requests have been largely ignored. It looks like some in state government are now ready to make loan modifications mandatory under the right set of circumstances.
Thursday, October 15, 2009
Reader Comments on Judge's Decision
Register Howe has written several posts on this blog regarding a major ruling by Land Court Judge Keith Long. Long's ruling says that the practice of mortgage holders of foreclosing on properties and later proving ownership is wrong. In an earlier post Register Howe explained this in more detail..."in each case the lender had conducted (or at least commenced) foreclosure proceedings before the documents assigning the mortgage being foreclosed to the entity conducting the foreclosure as recorded at the registry of deeds. The court ruled that such a situation left a defect in the title, reasoning that at a minimum, having such ambiguous documentation of the mortgage at the start of the foreclosure could suppress possible bidders to the detriment of the borrower/property owner who is indebted to the lender." Yesterday Judge Long denied a request made by Wells Fargo and refused to reverse his early decision. The Boston Globe published a follow up article on this issue which encouraged many reader comments. I selected several of these I found interesting and posted them below.
Readers Comments
Comment 1: His decision is correct... you cannot call in a debt without proving you are owed the money.
Comment 2: Judge Long ruled correctly. Land Court rules are clear with limited room for interpretation. Banks have been playing fast and loose with the law. Banks have legal council and I'm certain Council warned them about this matter. These banks may be headquartered in other states but Massachusetts law must be obeyed.
Banks have been conditionally selling to other banks that specialize in liquidation for a fast profit. They have refused to accommodate owners with mortgage adjustments on adjustable loans that charge horrendous interest rates and will not allow short sales and yes they have refused to maintain the homes, letting the homes fall into disrepair.
Comment 3: Lenders use every single word on the mortgage note to insure they (or their assignees) receive their monies. Borrowers have the justice system to make certain to fight what maybe a wrong. plus, a borrower doesn't want to pay off a loan and have another party come and say "you should have paid me"
Comment 4: However, it impacts normal sales in the sense that the rules of real property transfers are being upheld. Just as you can't sell your house to someone without their bank (or them) being comfortable that title is clear and having title insurance in case it isn't, now the lenders are being forced to play by those rules as well. If they had been/will be allowed to flaunt the rules, chances are some normal sales could be impacted as well by other people trying to flaunt the rules, or other rules to their advantage.
Commment 5: This makes absolutely not sense what so ever. Why? Well in Massachusetts all sales of property that involves a bank are done requiring a title rundown. Attorneys who do the title rundowns then certify to the Title Insurance Company that the title is free and clear. Plus the attorney makes sure that the appropriate paperwork is filed in the appropriate registry of deeds to show their is a mortgage on the property. So this all smells of incompetent work on the part of the attorneys, banks and even the title companies. There are more to blame here and each of these entities and if I am mistaken each can be sued or at least their insurance policies.
Now, I want to state one thing - in Massachusetts I have never known real estate attorney to make such a mistake on making sure the titles were clear. My guess is this was done by non professionals or attorneys from other states who were not up on Massachusetts procedures.
Commment 6: Sally Homeowner has Mortgage with ABC Bank. Sally Homeowner stops making payments. ABC Bank is just a servicer and doesn't know how to foreclose. ABC Bank assigns Mortgage to XZY Bank. (unfortunately this Assignment is never recorded at the Registry of Deeds). XYZ records a foreclosure complaint at the Registry of Deeds. XYZ forecloses and sells house to Billy Bargainhunter. Foreclosure is incorrect because Assignment wasn't recorded prior to Foreclosure complaint. So how could Sally Homeowner have possibly known what was going on?!?! I mean, she just thought if I stop making payments, I'll be fine. (sarcasm emphasis added here) Just a very tickytack ruling that has been disguised as consumer protection but is just a ruling based on emotions. Appeals Court would be wise to overturn this, which I'm assuming will happen next.
Readers Comments
Comment 1: His decision is correct... you cannot call in a debt without proving you are owed the money.
Comment 2: Judge Long ruled correctly. Land Court rules are clear with limited room for interpretation. Banks have been playing fast and loose with the law. Banks have legal council and I'm certain Council warned them about this matter. These banks may be headquartered in other states but Massachusetts law must be obeyed.
Banks have been conditionally selling to other banks that specialize in liquidation for a fast profit. They have refused to accommodate owners with mortgage adjustments on adjustable loans that charge horrendous interest rates and will not allow short sales and yes they have refused to maintain the homes, letting the homes fall into disrepair.
Comment 3: Lenders use every single word on the mortgage note to insure they (or their assignees) receive their monies. Borrowers have the justice system to make certain to fight what maybe a wrong. plus, a borrower doesn't want to pay off a loan and have another party come and say "you should have paid me"
Comment 4: However, it impacts normal sales in the sense that the rules of real property transfers are being upheld. Just as you can't sell your house to someone without their bank (or them) being comfortable that title is clear and having title insurance in case it isn't, now the lenders are being forced to play by those rules as well. If they had been/will be allowed to flaunt the rules, chances are some normal sales could be impacted as well by other people trying to flaunt the rules, or other rules to their advantage.
Commment 5: This makes absolutely not sense what so ever. Why? Well in Massachusetts all sales of property that involves a bank are done requiring a title rundown. Attorneys who do the title rundowns then certify to the Title Insurance Company that the title is free and clear. Plus the attorney makes sure that the appropriate paperwork is filed in the appropriate registry of deeds to show their is a mortgage on the property. So this all smells of incompetent work on the part of the attorneys, banks and even the title companies. There are more to blame here and each of these entities and if I am mistaken each can be sued or at least their insurance policies.
Now, I want to state one thing - in Massachusetts I have never known real estate attorney to make such a mistake on making sure the titles were clear. My guess is this was done by non professionals or attorneys from other states who were not up on Massachusetts procedures.
Commment 6: Sally Homeowner has Mortgage with ABC Bank. Sally Homeowner stops making payments. ABC Bank is just a servicer and doesn't know how to foreclose. ABC Bank assigns Mortgage to XZY Bank. (unfortunately this Assignment is never recorded at the Registry of Deeds). XYZ records a foreclosure complaint at the Registry of Deeds. XYZ forecloses and sells house to Billy Bargainhunter. Foreclosure is incorrect because Assignment wasn't recorded prior to Foreclosure complaint. So how could Sally Homeowner have possibly known what was going on?!?! I mean, she just thought if I stop making payments, I'll be fine. (sarcasm emphasis added here) Just a very tickytack ruling that has been disguised as consumer protection but is just a ruling based on emotions. Appeals Court would be wise to overturn this, which I'm assuming will happen next.
Wednesday, October 14, 2009
Old Plan Scanning
Several years ago we bought a Minolta over-head camera capable of creating digital images of Record Books. In the beginning we used it exclusively for scanning our older, larger books during the back scanning project. The minolta took a secondary role in the project when we made the decision to cut these books up. The Minolta was/is slow but accurate. Our goal is to complete the back scanning project by early November, a project in which we re-scanned close to 8,000 records books containing some three million pages. Once completed we will begin another project. The new project will require us to re-activate the Minolta over-head camera. The Registry has some old, rare Plan Books that have never been scanned. These books date back to as early as 1840 and have wonderful historical value. Because of this we have been very hesitant to disassemble them. They include old Atlases of Lowell, Locks and Canals Plans, Middlesex County Town Plans and others. Our goal is to scan these plans using the over-head camera and make them available to the public through the Internet and on our in house database.
Tuesday, October 13, 2009
Y2K plus ten
Ten years ago this fall we were in the midst of intense preparations for Y2K and all of the possible communications, computer and technology problems associated with it. In the future, those who didn’t live through it AND understand it will be tempted to belittle all the effort we expended on Y2K preparations, but the reality is that the work was necessary and beneficial. Back in 1999 this office was still using a Wang minicomputer that was running land management software that was not Y2K compatible. Written in the early 1980s when computer memory and storage were still scarce commodities, our LandTrac software only used six digits for dates, not eight. So a date such as October 13, 2009 would be entered in the system as 101209 making it indistinguishable from October 13, 1909 or 1809 or 1709. To fix this problem, we hired a half dozen contractors at great expense, but all was fixed and tested well in advance of New Years Day.
Y2K preparations had many ancillary benefits. In state government, at least, substantial funds were appropriated and spent on technological upgrades of all types. Having limped through the last few years of county government and transitioned to part of state government only in the summer of 1997, we were still using aged and obsolete computers and electronic equipment in 1999. Unlike the Wang software which we judged to be “repairable”, almost all of our other equipment was replaced. This action not only prepared us for the Y2K transition, it also gave us the information technology infrastructure we needed to make the paperless registry we have today a reality.
Y2K preparations had many ancillary benefits. In state government, at least, substantial funds were appropriated and spent on technological upgrades of all types. Having limped through the last few years of county government and transitioned to part of state government only in the summer of 1997, we were still using aged and obsolete computers and electronic equipment in 1999. Unlike the Wang software which we judged to be “repairable”, almost all of our other equipment was replaced. This action not only prepared us for the Y2K transition, it also gave us the information technology infrastructure we needed to make the paperless registry we have today a reality.
Friday, October 09, 2009
Motion to Reconsider on "Defective Foreclosure" case
Today’s Globe has a prominent story (“Foreclosure sales in limbo over title issue”) on the impact that a March 2009 Land Court ruling has had on property sales across the state. The ruling (here, in PDF form) addressed three similar cases brought by lenders to “remove a cloud from the title” of properties that had been foreclosed. In each case, the lender had conducted (or at least commenced) foreclosure proceedings before the document assigning the mortgage being foreclosed to the entity conducting the foreclosure was recorded at the registry of deeds. The Court ruled that such a situation left a defect in the title, reasoning that at a minimum, having such ambiguous documentation of the mortgage at the start of the foreclosure could suppress possible bidders to the detriment of the borrower/property owner who is indebted to the lender. (Our previous post on this case is here).
The Globe story reports that this case has stifled efforts by many municipalities, non-profits, and regular home buyers to purchase previously foreclosed homes. Because of this – and because the practice ruled improper by the case was so widespread – the plaintiffs in the case have asked the judge to reconsider his ruling. His decision on that motion may be released today.
The Globe story reports that this case has stifled efforts by many municipalities, non-profits, and regular home buyers to purchase previously foreclosed homes. Because of this – and because the practice ruled improper by the case was so widespread – the plaintiffs in the case have asked the judge to reconsider his ruling. His decision on that motion may be released today.
Thursday, October 08, 2009
Computers in 2020
This is a pretty interesting view of what computers might be like in the year 2020. Be sure to read the opening statements made a number of years ago by so called techie experts. You'll get a kick out of them.
Wednesday, October 07, 2009
Five years of foreclosures
After posting end of September statistics that showed a 100% increase in the number of orders of notice (the document that starts the foreclosure process)filed in September 2009 as compared to September 2008, someone asked that I provide a graph showing more long-term trends in foreclosures. Clicking here will open a PDF version of a line graph that tracks the number of orders of notice and of foreclosure deeds recorded here in Middlesex North on a quarterly basis from January 2004 up to the present. The largest number of orders of notice recorded during this period came in the 1st quarter of 2007 when 304 were recorded. Next came 1st quarter 2008 which had 268 (by way of comparison, September 2009 had 226). As for foreclosure deeds, the peak number was reached in the second quarter of 2008 (209 records) with 3rd quarter 2008 as the runner-up (155 recorded).
Tuesday, October 06, 2009
Bargains at foreclosure auctions?
More and more often people are asking me about foreclosure auctions as an opportunity to purchase a property for a home or as an investment. That folks are comfortable enough to begin thinking of investment opportunities is a good sign; that there are enough foreclosures to stimulate such thinking is not. After explaining that I’m no expert in real estate investment strategies, I do share my observation that the best deals can be had not at the foreclosure auction but by subsequently purchasing a property that has recently been foreclosed. Here’s how I see it:
In almost all foreclosures, the foreclosing lender is also the high bidder at the auction and so becomes the new owner of the property. Other possible buyers who show up at the auction tend to be looking for steep bargains and are unwilling to match what is bid by the bank. The foreclosing banks make relatively high bids for a number of reasons. The foreclosing lender has a fiduciary obligation to the borrower to obtain a fair value for the property and while there’s certainly no requirement that the auction obtain fair market value, the law requires something close to that absent extenuating circumstances. When the bank bids this higher amount, it is also trading one asset on its books (the debt owed by the homeowner) for another asset (the foreclosed home) of relatively equal value. This puts off the realization of the loss by the bank.
Although the foreclosing lender almost always becomes the new property owner, that is at best a temporary arrangement. Banks do not want to be in the business of owning real estate, so to move foreclosed properties off their roster of assets expeditiously, foreclosing lenders, as demonstrated by our statistics) tend to sell off these properties to third parties at significant discounts. So if you think you’re ready to move into the real estate market, track the Notice of Mortgagee’s Sales published regularly in the local newspaper. If you spot a property that interests you, attend the foreclosure auction and even bid if you think there’s a chance of success, but don’t be disappointed if you lose out to the foreclosing lender. Once the auction is over, just go up to the representative of the lender, identify yourself, and express your interest in this particular property. If the circumstances are right, you could end up the owner of the property at an extremely attractive price.
In almost all foreclosures, the foreclosing lender is also the high bidder at the auction and so becomes the new owner of the property. Other possible buyers who show up at the auction tend to be looking for steep bargains and are unwilling to match what is bid by the bank. The foreclosing banks make relatively high bids for a number of reasons. The foreclosing lender has a fiduciary obligation to the borrower to obtain a fair value for the property and while there’s certainly no requirement that the auction obtain fair market value, the law requires something close to that absent extenuating circumstances. When the bank bids this higher amount, it is also trading one asset on its books (the debt owed by the homeowner) for another asset (the foreclosed home) of relatively equal value. This puts off the realization of the loss by the bank.
Although the foreclosing lender almost always becomes the new property owner, that is at best a temporary arrangement. Banks do not want to be in the business of owning real estate, so to move foreclosed properties off their roster of assets expeditiously, foreclosing lenders, as demonstrated by our statistics) tend to sell off these properties to third parties at significant discounts. So if you think you’re ready to move into the real estate market, track the Notice of Mortgagee’s Sales published regularly in the local newspaper. If you spot a property that interests you, attend the foreclosure auction and even bid if you think there’s a chance of success, but don’t be disappointed if you lose out to the foreclosing lender. Once the auction is over, just go up to the representative of the lender, identify yourself, and express your interest in this particular property. If the circumstances are right, you could end up the owner of the property at an extremely attractive price.
Monday, October 05, 2009
Leave the Gun, Take the iPhone
This is a quiz…which one of the three stories below do you think is a true story?
Story A
A man walks into an Apple Computer Store, takes out a gun and points it directly at his malfunctioning iPhone and says to the clerk… “I know what you're thinking. Did he fire six shots or only five? Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow the touch screen right off this iPhone, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
or
Story B
A man walks into an Apple Computer Store and takes out a gun and points it directly at his malfunctioning iPhone. The Apple Store clerk says he can’t fix the phone and the man responds…
"We won’t let that happen.
Whose we?
Smith, Wesson and I.
Now fix it."
or
Story C
A man walks into an Apple Computer Store and brings his malfunctioning iPhone over to the Genius Bar and tells the clerk he is having a problem with his phone. He then says “I’m so mad, I could pop a 9mm into it”. He continues the threat “I’ll do it right now!”. He then lifts up his shirt revealing his concealed handgun.
So which of these do you think is true, Story A, Story B or Story C? If you guessed A or B you are wrong..Story C is actually the true story.
Friday, October 02, 2009
Busy end of November?
Over this past weekend I received the following email from a local real estate broker:
Unfortunately, because the registry is only a tenant in the courthouse, we cannot control the hours that the building is open. That’s set by the Trial Court which provides access control and overall security. Because this is an active courthouse, the importance of security cannot be minimized.
The good news is that the registry of deeds is only closed on Thanksgiving Day which is November 26. We are opened all day on Wednesday, November 25 and all day on Friday, November 27 (although a significant portion of the staff will be off that day). Still, given the volume of documents we recorded several years ago (700 per day), we should have no trouble keeping up with whatever recordings come in at the end of November. I must mention, however, that there are only a few tables available for public use, so please consider doing closing at someone’s office or some place other than the registry to ensure an appropriate environment for such important transactions.
I'd like to make a suggestion that the last few full working days of November, the Registry of Deeds extend its hours to 8pm. There are going to be SCORES of 1st-time buyers trying to close on homes those last few days. My suggestion is to have the Registry open 'til 8pm on the following days: Monday (23rd), Tuesday (24th), Monday (30th). The 25th is a short day and the 26th and 27th are holidays. Thanks for your consideration.
Unfortunately, because the registry is only a tenant in the courthouse, we cannot control the hours that the building is open. That’s set by the Trial Court which provides access control and overall security. Because this is an active courthouse, the importance of security cannot be minimized.
The good news is that the registry of deeds is only closed on Thanksgiving Day which is November 26. We are opened all day on Wednesday, November 25 and all day on Friday, November 27 (although a significant portion of the staff will be off that day). Still, given the volume of documents we recorded several years ago (700 per day), we should have no trouble keeping up with whatever recordings come in at the end of November. I must mention, however, that there are only a few tables available for public use, so please consider doing closing at someone’s office or some place other than the registry to ensure an appropriate environment for such important transactions.
Thursday, October 01, 2009
September stats - more foreclosures ahead?
While the overall recording statistics for September trended positive, one number of great concern leaps out at you and that’s a major increase in the number of orders of notice recorded in September 2009 when compared to the same month in 2008. You will recall that an order of notice is a document issued by the Land Court that marks the beginning of the foreclosure process. When an order of notice is recorded, there’s a very good chance that a foreclosure deed will follow in six to nine months. This just past month, we recorded 97 orders of notice while last September, we recorded only 49 - that’s a 98% increase. The numbers were spread evenly between Lowell and the towns with the Lowell number rising from 24 to 48 and the towns increasing from 25 to 49. I can’t offer any theories as to why there’s a sudden increase - the September number is up 56% from the preceding month - but it does signal that there could be an upsurge in foreclosures coming early in 2010.
Statistics for other document types do present a more positive picture. The number of foreclosure deeds were down 19% for Lowell and 37% for the towns; the number of deeds increased 14% for Lowell and 5% for the towns; but the number of mortgages was mixed, dropping 12% for Lowell but rising 36% for the towns.
Statistics for other document types do present a more positive picture. The number of foreclosure deeds were down 19% for Lowell and 37% for the towns; the number of deeds increased 14% for Lowell and 5% for the towns; but the number of mortgages was mixed, dropping 12% for Lowell but rising 36% for the towns.
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