New bill aids tenants in foreclosed properties

The Globe reports that the Massachusetts state legislature just passed a bill called "An Act to Stabilize Neighborhoods" which, among other things, prohibits lenders who take possession of foreclosed properties from evicting tenants who are up to date in their rent at least until the property is ready to be sold to a third party. A representative of big lender Citibank criticized the bill, saying "We have a responsibility to recover the property either for ourselves or the investor-owner of the mortgage, so it can be marketed and sold promptly." The newspaper story also quotes other lenders as saying the new law will make it more difficult to sell foreclosed homes if tenants are still living in them. I suppose that's true, but I can see why the legislature might be more concerned with protecting the interests of innocent tenants than those of foreclosing lenders. This new bill has other requirement designed to curtail foreclosures including a requirement that lenders meet and negotiate with home owners prior to commencement of foreclosure proceedings.

Forbe's Top Ten Lists

Here are a couple of fun lists just released by Forbes Magazine

Top Ten Youngest Cities in the US
1 Jacksonville, NC 22.8
2 Provo, UT 22.9
3 College Station, TX 23.6
4 Auburn, AL 23.7
5 San Marcos, TX 23.8
6 Logan, UT 23.9
7 Normal, IL 24.3
8 New Brunswick, NJ 24.7
9 Orem, UT 25.1
10 Bloomington, IN 25.4


Top Ten Happiest Places in the US

1. Louisiana
2. Hawaii
3. Florida
4. Tennessee
5. Arizona
6. Mississippi
7. Montana
8. South Carolina
9. Alabama
10. Maine


The Top Ten Places to Retire in the US
1 Atlanta-Sandy Springs-Marietta, GA
2 Dallas-Fort Worth-Arlington, TX
3 Tampa-St. Petersburg-Clearwater, FL
4 Houston-Sugar Land-Baytown, TX
5 St. Louis, MO-IL
6 Austin-Round Rock, TX
7 Las Vegas-Paradise, NV
8 Phoenix-Mesa-Scottsdale, AZ
9 Kansas City, MO-KS
10 San Antonio, TX

More Elevator Pictures

If you drive by the Lowell Superior Courthouse you might think there isn't much going on with the construction of the new elevator, Wrong!

There have been major changes on the interior. The pictures below show the new accessible hallway leading to the first floor of the Registry of Deeds and windows mounted on a wall dividing the registry's old Administrative office.

Increased liability for snow and ice?

The Supreme Judicial Court yesterday announced a new rule of liability for property owners when it comes to snow and ice. In Papadopoulos v Target Corporation, the plaintiff slipped and fell on ice in the parking lot outside the defendant's store at the Liberty Tree Mall in Danvers. The trial judge granted summary judgment in favor of the defendants, ruling as a matter of law that the offending ice was a "natural" accumulation for which the defendant was not responsible. In the decision announced yesterday, the SJC abolished the "natural versus unnatural accumulation of snow and ice" distinction that had been the law in the Commonwealth for more than a century in favor of a duty of reasonable care under the circumstances. (Although I haven't been involved in any private legal matters for 15 years, I am relieved that the old rule was jettisoned - I've never been able to understand the natural v unnatural distinction).

It will take another wave of lawsuits to clarify this new rule, but in the meantime, I expect litigation regarding snow and ice to increase. Just one more reason why homeowners should get down here to the registry and get a homestead recorded.

Interns Working

Three summer interns from the Lowell Career Center began work at the Registry of Deeds several weeks ago. During our first week they scanned Assessor Indexes for our Middlesex North towns into our public server. The primary idea behind this project was to familiarize the interns with our scanners, but it had the added benefit of making the indexes easier to search for our Customer Service Department. This "training project" prepared the interns to take the lead on a cooperative effort we planned to undertake with the City of Lowell.
In mid-July Lowell brought us a box of ANR Applications (Approval Not Required). The folders include the original application, the fee receipt, a plan and some other miscellaneous information. We explained the project to the interns and what was expected.
Our young workers took the initiative and set up an assembly line like process to deal with the documents.
Here is how it works... One Intern opens and scans the application and fee receipt; a second intern scans the miscellaneous information and separates the plan from the other documents. And the third intern, using a Minolta overhead camera, scans the plan.
Their system works well. The documents remain organized and the work moves along swiftly.
I estimate that since the project began the interns have scanned approximately 300 applications for Lowell.
Great job!

Plan Formatting Standards

We had a couple of unusual looking plans be presented for recording this week which caused me to revisit our Plan Standards which can be found in Appendix B of the Massachusetts Deeds Indexing Standards. Here are the standards in their entirety:

PLAN REGULATIONS
1. Size of Plan. Plan sizes shall be a minimum of eight and one-half inches by eleven inches (8 1/2" x 11") and a maximum of twenty-four inches by thirty-six inches (24" x 36")

2. Plan Material. Plans being presented for recording shall be on linen or polyester film (“mylar”), single matte with a thickness of .003 mils1, and must have an opacity so as to allow consistent computer scanning and Diazo and microfilm reproduction.

3. Type of Ink. All plans shall be prepared using a compatible ink with excellent cohesiveness which will produce a permanent bond and result in a plan with long term durability. All signatures must be in black India ink or its equal.

4. Plan Reproductions. Linen or polyester reproductions shall be accepted for recording provided they contain original signatures and comply with the other requirements for the recording of plans.

5. Borders. Each plan shall have three quarter inch (3/4") borders.

6. Size of Letters. The minimum letter size on plans presented for recording shall be one-eighth (1/8") if free-hand lettering is used and one-tenth inch (1/10") if lettering guides are used.

7. Graphic Scale. Each plan presented for recording shall include a graphic scale.

8. Recitations or Certifications. Each plan shall have an area reserved to receive planning board recitation or contain a surveyors certification as per Chapter 380, Acts of 1966 (G.L. c. 41, s. 81x).

9. “Registry Square.” Each sheet of each plan shall have a three and one-half (3 1/2") square

10. Certification Clause. Each plan must contain a certification clause signed by the person preparing the plan stating that he has conformed with the rules and regulations of the Registers of Deeds in preparing the plan.

11. No Tape or Raised Print. No tape adhesion or the like shall be placed on any plan presented for recording or registration. Plans presented for recording shall not contain any raised print.

The first plan was a condominium site plan that showed the footprint of the buildings on the lot. The buildings were clear enough but existing foliage was depicted on the plan in big globs of green. From my reading, the standards are silent as to the use of color in the plans. We were able to make a scan of the plan that showed all features even though the green on the original came out as gray on our black and white scanner/printer so I allowed the thing to be recorded. Certainly color adds much to plans but our equipment and software is all designed for black and white. In the short term, there will be a temptation to amend the rules to ban colored markings on plans, but I think that would be short sighted since eventually the equipment needed to work with color will become affordable to us.

The second issue involved a condo floor plan that was done on an 14-inch by 8.5-inch sheet of Mylar. So much was crammed onto the plan that the 3x3 inch "registry box" required by the plan regulations was omitted. (One of the things taking up space was the draftsman's certification that the plan "complied with the rules and regulations of the registry of deeds." We were able to squeeze the recording information into the margin so I did allow the plan to be recorded, but if we see any more plans like this we will have to become more strict in applying the regulations.

Lowell Folk Festival

This Friday night kicks off the annual Lowell Festival at stages and other sites throughout the city's downtown. Besides musical performances, the Festival features ethnic food booths and artisan demonstrations. A full schedule of activities, instructions for parking, and information about the performers and participants are available on the Lowell Folk Festival website.

Re-recorded deeds and the excise tax

First, let me remind everyone that Article 7-11 of the Massachusetts Deeds Indexing Standards states "The former practice of 're-recording' an original document to correct an error or omission is prohibited." The Registers of Deeds Association formulated this rule several years ago after a vigorous debate on the propriety of allowing already-recorded documents to be recorded again. The consensus was that even though the practice was widely allowed, the minimum that should be required was the re-execution of the document. With that as the minimum requirement, the association decided it would be better to simply require an entirely new document.

With that as background, here's the main point of this post: If a deed has already been recorded, does a re-executed version of that deed that purports to convey the property from and to the same parties for the same consideration require the payment of another excise tax? Or does the payment of the tax with the first recording suffice? My feeling was that since there was only one payment of consideration, there was only one taxable event, notwithstanding the two deeds. My rationale was that if a single deed is recorded in two registries, we only charge for the tax at the first recording.

When this topic came up at a Registers Association meeting earlier this year, many of my colleagues felt that the better practice was to require the payment of the tax on the second deed and leave it to the seller to file for an abatement of the tax with the Department of Revenue for the double payment. The thinking was that to rely solely on the assertion of the person presenting the document for recording that the tax had already been paid would create too much of a risk of fraud. While I was on vacation last week, however, this issue arose here in Lowell and we called the Department of Revenue who told us it was OK to exempt the second deed based on the first recording where the book and page number of the initial deed that contains the tax stamp for the transaction are written on the second recording. In questions of collecting excise tax, I'll go with DOR's rules.

While this issue arises only rarely, it is happening more often these days with foreclosure deeds which may have something to do with missing assignments.

REBA v NREIS

Last month the US Court of Appeals for the First Circuit issued its ruling in Real Estate Bar Association for Massachusetts v National Real Estate Information Services, a case in which REBA sought to enjoin real estate closings that weren't conducted or supervised by Massachusetts lawyers. The case ended up in the US District Court where the judge not only ruled against REBA, but also awarded NREIS attorney fees of almost $1 mil. REBA appealed.

The 1st Circuit reversed the District Court's decision (especially the imposition attorney fees)ruling that what did and did not constitute the unauthorized practice of law in this area was unclear under Massachusetts law. To get a determination of that, the Court of Appeals certified the question to the Massachusetts Supreme Judicial Court. The SJC decision which will be a year or more than a year in the future, will have great implications for the real estate closing business for everyone involved.

Here's the full 1st Circuit decision.

I Say TheFacebook, You Say Facebook

Facebook has over 500 million users making it the largest social networking site in the world. This incredible number of users manifests the huge value of the company...how about in the $billions.
Could this empire be vulnerable to a lawsuit involving the small payment of $1,000 to Facebook’s creator, Mark Zukerberg?

It is an interesting story...

In 2003 Paul Ceglia claims he made a deal with Zukerberg. Ceglia says he gave Zukerberg $1,000 to finance the creation of a social networking site and in return he would received 50% interest in the site plus 1% interest per day if the site was not finished by January 1, 2004. Zukerberg finished the site on February 4, giving Ceglia an 84% interest in the new site. They called their new social networking site (get this) “TheFacebook”.

Shortly after, Zuckerberg decided to create a new company and created a new social networking site.
The name of the new company? Facebook, Inc
And the name of the new site? Facebook
I kid you not! Zuckerberg changed TheFacebook to Facebook and drop Ceglia.

Ceglia has filed a lawsuit screaming, foul! He feels Facebook is just the next generation of his TheFacebook.
Zuckerberg feels differently.
But what is making this really interesting is a New York Court Judge “has issued a temporary restraining order restricting any transfer of assets by Facebook, so there must be something happening here.

I wonder if the settlement will be called ThePayoff or just Payoff.

Update: Elevator Construction Photos

Elevator construction is well under way at the Superior Courthouse in Lowell. Last week the construction crew hit a small problem. They found two large boulders under the original stairs where the elevator is going to be built. It took several days to remove the huge rocks using drills and hammers.

Below are the current pictures of the work site.

Apps Just For You

Google just intensified the Smart Phone war big time.
First a little background...Several years ago Google developed a software that runs smart phones called Android and made it available to all smart phone manufacturers.
And some pretty big names took advantage of it...Texas Instruments, HTC, LG, Motorola (just to name a few) all began making their own version of the Andriod phone (remember the Driod commerical during the Super Bowl?).
Today Andriod driven phones out sell both iPhone and Blackberry.
Now this is how Google “kicked the battle up a notch”...
In the words of Steve Lohr of the New York Times, “Google is bringing Andriod software development to the masses”.
In other words Google developed a kind of “Lego style” software that allows Andriod users to develop their own Apps... They call it...the App Creation Program.
Think about the potential!
You could completely personalize your smart phone by running Apps that specifically deal with “your” needs. Here is an example...Using the phones GPS capability you could develop an App that would send a text message out to your Lowell friends every time you visited the city. Pretty cool right...
And listen to this one. A nursing student that took part in testing Google’s new App Creation Program developed an incredible App. Using the phones accelerometer (that’s the thing that changes the screen when the phone is turned sideways) the nurse developed an App that programed the phone to call an emergency number if the person holding it fell down. How about something like that for an aging parent or friend?
I’m betting the ability to create Apps for your own phone App is going to take off and give a huge advantage to Andriod phones over the competition. In the future when someone asks "is there an App for that", I think the anwser just might be "no, but I'll make one".
Watch out iPhone

Soccer is Not For Me

I want to let you know, I tried, honest...
I really, truly tried to get into the World Cup Soccer game between Spain and the Netherlands Sunday, but I just couldn’t.
Straight talk, (as John McCain would say)...In my opinion, Soccer stinks.

I know the whole world loves the game, but it does nothing for me.
Hey, I’m fair minded. I’ll admit some of the blame is mine, especially since the only thing I understand about soccer is that one team tries to get to the ball into the other teams goal.
And on the rare occasion when that happens, the announcer yells ggggoooooaaaaallll for what seems like an eternity.

Here is a perfect example of why I don’t like soccer...
Sunday I’m watching the game in my living room...score, zero to zero (what else is new).
My wife calls out “how much time is left in the game”.
I look at the clock. I didn’t have a clue “I don’t know”, I said.
"How can you NOT know? You’re watch it aren’t you? What does the clock say?"
I responded, "the clock says 90:20 minutes".
"Well, how many minutes do they play in a soccer game".
"90 minutes", I answered...
"Then why are they still playing, if its over in 90 minutes?
In a perplexed tone I yelled back, "I don’t know, something about playing an extra three minutes".
"For what?"
"I don’t know. The announcers said the Referee wanted to, I think".
And so on and so on.

Come on, tell the truth...do you really know how they "time" a professional soccer game? I don’t.

And I am not even going to mention those obnoxious horns...buzzzzzzzzzzzzbuzzzzzzzzzzzbuzzzzzzzing...It goes on the entire game. Their irritating noise actually made me look forward to the commercials. Whoever sells those should have their vending license revoked.

OK, I’m going to end on a high note...The Patriots first preseason game is August 12! and they play 60 minutes of football regardless of how the Ref feels.

Recent foreclosures and resales

We make an ongoing effort to track foreclosure activity in our district since it has such a significant impact on housing prices and the health of the local real estate industry. This morning I was looking at foreclosure deeds for Lowell recorded since June 30, 2010 (of which there were 39). Three of those have already resold to third parties which gives us a glimpse of the effect of a foreclosure on home prices. These aren't representative, they're just the one's that are currently available:

10 Westview Road was purchased on October 3, 2006 for $410,000. At a foreclosure auction held on February 4, 2010, the lender purchased the property back for $408,699. The foreclosure deed wasn't recorded until June 8 and the property sold to a third party on July 8 for $284,000.

17 Caddell Ave was purchased on September 23, 2005 for $223,500. At a foreclosure auction held on April 28, 2010 the lender purchased the property back for $184,351. The foreclosure deed was recorded on June 21 and the property was sold to a third party on July 9 for $85,000.

22 Ennell Street was transferred between related parties on April 25, 2006. They immediately obtained a mortgage of $176,000. At a foreclosure auction conducted on April 28, 2010, the lender purchased the property back for $85,500. The foreclosure deed was recorded on July 7 and two days later the property was sold to a third party of $37,000.

While these three cases are insufficient to draw any broad conclusions, they do provide some insight into what is happening with real estate. We'll continue to provide data like this in the coming days and weeks.

Strategic Defaults

The New York Times reports that the highest incidence of mortgage foreclosure these days involves loans in excess of $1 million. One in seven homeowners with big mortgages are "seriously delinquent" while only one in 23 borrowers with loans of less than $1 million are in the same category.

Those in the real estate business assert that the higher rate of foreclosure by wealthier individuals is not because they lack funds to make their monthly payments, as difficult as that may be. Instead, they have a greater willingness to walk away from a money-losing situation, just as they would dump any other investment gone bad. The article quotes Brent White, a professor at University of Arizona School of Law as saying “They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest.”

Lenders fear that if the less affluent ever come to realize that walking away from an underwater might be the best move long-term, the problems with our financial system will worsen substantially. For Massachusetts borrowers, however, this option might not be so attractive. In most of the rest of the country, home mortgages are non-recourse, meaning the borrower's liability on the loan is limited to whatever can be obtained by auctioning off the house. In Massachusetts, the lender may still look to the borrower's other and future assets to satisfy any deficiency the remains after the foreclosure auction.

Property Fraud Alert

A friend dropped off a pamphlet he picked up at the Hillsborough County (NH) Registry of Deeds that describes a service called Property Fraud Alert. Hillsborough and most of the other New Hampshire registries have partnered with a company called Property Fraud Alert to provide a service that notifies homeowners any time a document containing the homeowner's name is recorded at the registry of deeds.

The intended purpose of this service is to tip off the homeowner if a fraudulent deed or mortgage is recorded. It has never happened in the Middlesex North District (as far as I know), but the scenario works something like this: A wrong doer drafts a deed that purportedly conveys your house from you to co-conspirator, forges your name and the acknowledgement and then records the deed. Using that deed as evidence of ownership, the wrongdoer then applies for and obtains a mortgage. He pockets the proceeds of the mortgage and never makes any of the monthly payments. That lender then initiates foreclosure proceedings against the home (which you're still living in) and the first time you know anything about it is when there's an auctioneer on your front porch chanting "going once, going twice . . ."

Now basic real estate law says that a forged deed conveys no title so you would still be the owner of the property, but you would still have the burden of proving that the deed was fraudulent which might put you to considerable expense (not to mention stress and aggravation). This notification service, if it worked the way it is intended to, would have sent you some type of notice when that fraudulent deed was recorded, giving you a head start in getting it cleaned up and perhaps even catching it before the bogus mortgage was recorded.

This issue arose last summer when the AARP magazine published an article about the risk of fraudulent deeds. My own opinion is that because the incidence of this kind of wrongdoing in this part of the country is so rare, the likelihood of "false positives" and the harm they would cause outweigh the possible benefits. By false positive, I mean a routine (and legitimate) document that would trigger a notification that might in turn cause needless stress and anxiety to the homeowner. But that's all subject to change depending on the circumstances.

Its A Hot One

Its a hot one. Temps are pushing 96 degrees again today for the fourth day in a row and it is oppressive...

But, speaking of hot ones...the highest temperature in the US was recorded in Death Valley, California in 1913, 134 degrees F. Now that's hot.

And speaking of hot...did you know there are only two US states that have never recorded temperatures above 100?...You guessed it, Hawaii and Alaska

And speaking of crickets...did you know "supposedly", that if you count the number of chirps a cricket makes in 15 seconds then add 37 you'll get the temperature..."supposedly".

And speaking of lightning...did you know "supposedly" if you count the seconds between the flash of lightning and the sound of thunder and divide that by two, the result is the number of miles the lightning is away..."supposedly".

And speaking of thunder...did you know that extreme heat (54,000 degrees F) from lightning causes air to expand and the expansion sends a shock wave that creates thunder.

And speaking of Amarillos...nah, I'm only kidding. Keep cool.

The Heat Wave and Old Buildings

Before work today I zipped into Logan Airport to pickup someone arriving from Florida. My passenger reported that the temperature in Orlando this morning was at least 10 degrees cooler than it was in Boston. Here in Lowell, the courthouse remains comfortable despite the 18 foot ceilings and lack of central air conditioning. The scattered window units are keeping the inside temperature tolerable although that might change by the end of the day.

A few years ago I read an "air quality" study of this building and was pleased and surprised to discover the sophisticated air exchange system that was included in the building's 1894 design. Every interior door has a functioning transom above it. By opening the transom, warm air that rises to the ceiling flows out of the room even when the door is shut. This in turn draws fresh air in through open windows or, if windows are closed, through the small openings that occur when 19th century windows sit within their frames. Add to this the three story atrium at the center of the building with roof vents at the top and you have a very effective ventilation system that works entirely on its own. Unfortunately, "modern" additions to the building have altered or sealed up the components of this ventilation system, so it probably worked better in 1910 than it does in 2010.

Update on Index Images

A decade ago we scanned all of our pre-1976 indexes, the ones not already on our computerized system, and since then we've struggled to find a way to make them available on our website. The only thing that's worked thus far has been to bundle the individual page images into very large PDF documents. We've made these PDFs available on the registry's in-house public search terminals and will provide a complete copy for home or office use to anyone who brings us a 16GM USB drive. But the challenge has been to make this material available to everyone with an internet connection, 24/7.

We have now made a significant step towards accomplishing this goal, having caused all of the old index page images to be loaded onto the "new" masslandrecords site. Before it all is ready for public use, however, we must create a set of instructions and fine-tune the way the information is presented. That all should be accomplished in the next few weeks.

End of June statistics

at the end of each month we measure how that month's recording statistics compared to those of the same month one year earlier. Perhaps the only good news for June is that the number of deeds recorded is up by 13% district-wide. While that's certainly not evidence of a recovery, it at least means that home sales aren't worsening. Other document categories paint a bleaker picture. The number of mortgages recorded was down 31% which corroborates anecdotal reports that it is exceedingly difficult for anyone to finalize a new mortgage these days. Foreclosure deed recordings are up, as well. In Lowell, they grew from 19 in June 2009 to 29 in June 2010, a 53% jump. That increase was nothing compared to the rate of foreclosure deed recordings for the nine district towns which rose from 5 to 31. I won't even report what percentage increase that is; the number is too frightening.

The overall number of documents recorded was down slightly, falling 5% from 5855 to 5540. For the first six months of 2009, we recorded 31,916 documents while for the same period of 2010, we only recorded 28,322, a drop of 11%. If we project the first six month out over the entire year, it would leave us with only 56,644 documents for 2010, a 13% decrease from the 64,924 actually recorded in 2009.