The failure of TARP

In an Op-Ed in yesterday’s New York Times, Neil Barofsky, the outgoing Special Inspector General from 2008 until yesterday of the Troubled Asset Relief Program (TARP), lamented that the program had failed to meet “some of its most important goals.”

Though there is no question that the country benefited by avoiding a meltdown of the financial system, this cannot be the only yardstick by which TARP’s legacy is measured. The legislation that created TARP, the Emergency Economic Stabilization Act, had far broader goals, including protecting home values and preserving homeownership.

These Main Street-oriented goals were not, as the Treasury Department is now suggesting, mere window dressing that needed only to be taken “into account.” Rather, they were a central part of the compromise with reluctant members of Congress to cast a vote that in many cases proved to be political suicide.
The act’s emphasis on preserving homeownership was particularly vital to passage. Congress was told that TARP would be used to purchase up to $700 billion of mortgages, and, to obtain the necessary votes, Treasury promised that it would modify those mortgages to assist struggling homeowners. Indeed, the act expressly directs the department to do just that.

But it has done little to abide by this legislative bargain. Almost immediately, as permitted by the broad language of the act, Treasury’s plan for TARP shifted from the purchase of mortgages to the infusion of hundreds of billions of dollars into the nation’s largest financial institutions, a shift that came with the express promise that it would restore lending.

Barofsky goes on to say that mismanagement of TARP turned it into a program that helped almost exclusively the nation’s largest banks and deprived everyone else of its benefits. That has tainted the legacy of TARP and pretty much ensures that any

Reptile Takes to New Media

Did you catch the story about the snake that escaped from the Bronx Zoo in New York City. The crafty reptile has been on the loose since last weekend frustrating searching zookeepers.

And this isn't just any snake...I mean, this is an Egyptian Cobra, one of the most dangerous snakes in the world. Zoo officials believe the Cobra is hiding somewhere right in the zoo...but, evidence has surfaced that might indicate they are wrong. Recently, the venomous cobra has set up its own Twitter account and is sending tweets chronicling its new found freedom...and these tweets indicate the slithering escapee is very mobile and sighting seeing in New York City.

Below are some recent messages tweeted by the fugitive that will give you an idea of just what it has been up to. You can follow all the creature's tweets at BronxZoosCobra.

I want to thank those animals from the movie "Madagascar." They were a real inspiration.

Gonna listen to some Jazz tonight. You know I love some great flute work. Do they provide it or is it bring your own basket?

Leaving Wall Street. These guys make my skin crawl.

Holding very still in the snake exhibit at the Museum of Natural History. This is gonna be hilarious!

A lot of people are asking how I can tweet with no access to a computer or fingers. Ever heard of an iPhone? Duh.

Dear NYC, Apples and snakes have gone together since the beginning.

Anyone know of a good vegan restaurant near Union Square?

Making unintelligible words intelligible

Have you ever purchased tickets online and had to decipher one of those scrambled, hard-to-read words before proceeding to the check-out phase of your purchase? That funny word is called a "captcha" and it's intended to ensure you are a human and not a machine that is programed to game the system. Only a human being can recognize these words and then re-enter them from a computer keyboard.

It turns out that this process is doing more than just separating you from a machine. This article in today's New York Times explains that these catchas serve a second purpose: every one of them is a word from an old text that an OCR (Optical Character Recognition) program was unable to recognize. Such words are siphoned off into this program and presented as captchas. When you type the word, your effort is funneled into a sophisticated computer program that compares the letters you type with the letters typed by others for the same word, and does a few other quality control things (like checking the word in the text before and after this unknown word to create some kind of context) and finally, the computer determines the identity of this previously unknown word. The accuracy rate of this method is higher than that of an individual typist doing purposeful verification of the words and this costs almost nothing. Millions of words are sorted out this way every day.

Pay By Cellphone

Every so often something comes along that's a game changer...especially in the technology world. And I believe one is right on the horizon...Making credit payments with a cellphone.

Let me explain further...Imagine you are checking out at a local retail store. The cashier gives you the total, and you swipe your credit card through the reader. Easy!

Shortly, this will change forever. Here is how...In the future rather than swipe a credit card, you will swipe your cellphone over a card reader. Honest, your cellphone.

Cellphone credit paying is a game changer in more ways than one. The most obvious is convenience.

But the really big question is..."Who gets the fee for the swipe?". Possible recipients...The bank that issued the "credit card"; or the credit card company itself; or how about an independent payment company like PayPal; or possibly your cellphone carrier(verizon, AT&T)...and lets not forget Apple! Apple wants in the act too angling to make iTunes the collection agency for credit payments made through the iPhone.

Cellphone credit paying is going to make billions for one of the above and that's why it is a game changer.

Indictments for First Time Home Buyer Fraud

The Globe reported today that the US Attorney's Office in Boston has announced the indictment of 14 individuals for fraudulently claiming the first time home buyer tax credit that pumped some much needed energy into the housing market last year. Several of those indicted paid for home purchases but recruited others who had never previously owned homes to become the owners of record to qualify for the tax credit. Another individual, an IRS employee, is alleged to have claimed the credit for claiming to have bought his house in 2008 when he had actually bought it in 2007. A representative of the Inspector General of the IRS acknowledged that something like $26 million in first time home buyer credits were erroneously or fraudulently claimed, but that indictments like these prove that “Congress created and modified the home buyer credit to stimulate and help taxpayers achieve the American Dream, not to line the pockets of wrongdoers."

While I'm pleased that people who improperly claimed this tax credit are being found-out, my sense of equity says that hauling a few dozen people who wrongly or erroneously claimed a maximum $8000 credit into US District Court on criminal indictments is a bit of overkill coming from a government that has so infrequently prosecuted those whose recklessness and complicity in fraudulent behavior cost the tax payers of America hundreds of billions of dollars in bailouts of so many financial institutions.

"Add a name to my deed"

The email link on www.lowelldeeds.com comes directly to me, so I'm the person who answers all of our incoming customer questions. This inquiry from earlier today contains two of the most commonly held misconceptions about real estate:

Hello,
My house on Worcester, MA was paid off already but I would like to add my sister as co-owner to my deed. What will I do? Do I need or her to pay any fee or tax for add her name on deed? If have, how much for tax and fee? When will I receive original deed after I paid off mortgage? Do I need lawyer for add her name on deed? If have, how much for hire lawyer? Please help me.

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Here's my response:

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You raise a couple of issues:

(1) documents for Worcester are recorded in the Worcester Registry of Deeds, not here in Lowell. the Worcester website is http://www.worcesterdeeds.com/

(2) We do not hold your deed as security until you pay off your mortgage. That's a common misunderstanding held by many homeowners. When you bought your property, you or your lawyer would have been given back your original deed once the registry made an official copy of it. If you do not have your original deed, you can obtain a certified copy of it from the registry of deeds. The certified copy has the same legal effect as the original.

(3) As for making your sister a co-owner of the property, it's not correct to say that you will "add her name to the deed." What you have to do is convey an interest in the property to her. You do that by signing and then recording a new deed. The new deed would say something like "BROTHER grants the property to SISTER and BROTHER . . ." Creating a deed can be very complicated and given the value of the asset involved, it's always best to hire a lawyer to create the deed for you. I don't know how much a lawyer would charge but it should not be on the low end of whatever lawyers charge to do things. Once the deed is created, signed and notarized, it will have to be recorded. The recording fee payable to the registry for a deed is $125. Massachusetts also imposes a tax on the sale of real estate but that tax is based on the sales price. If this transfer is a gift - that is, your sister is not paying you anything for it - then there would be no tax.
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I'm not sure if this is just real estate inside baseball, but I think anything that we collectively can do to raise the legal aptitude of homeowners, it's of benefit to everyone.

Elevator Update

It is obvious from the picture below that the new elevator at the Lowell Superior Courthouse, home of the Middlesex North Registry of Deeds, is close to completion. Brick work is moving along quickly inside a heated plastic enclosure on the outside of the shaft and the attractive new interior molding matches this historic building perfectly.

Statistics for March 1 -21

With the real estate market sending mixed messages about its direction, I've taken to viewing the recording statistics each week. Here they are for the first three weeks in March of 2011 compared to the same period in 2010:

The number of deeds recorded was up 7%, from 218 to 234

The number of mortgages recorded was up 14%, from 495 to 565

Orders of Notice were down430%, from 74 to 47

Foreclosure Deeds were down 30%, from 33 to 23

Twitter Turns Five Years Old

Happy Birthday Twitter!

This is a great video, be sure to play it...especially if you're a Beatles fan.

Yes, amazingly its been five years since Twitter co-founder Jack Dorsey sent the world its first tweet "just setting up my twttr". Since that time the micro-blogging site has exploded and I mean exploded.

Since March 21, 2006 literally billions of Tweets have been sent. In fact...today experts estimate that close to one billion are sent every week. These staggering numbers have increased Twitter's value significantly. In 2008 Facebook offered to purchase Twitter for $500 million. Today the company's estimated worth is between $8-10 billion.

Mistakenly, some see Twitter as a forum where people post what they ate for breakfast. But, recently, Twitter's role in reporting events during times of political unrest and natural disasters has lifted its status. During its recent elections the Iranian government banned media coverage...Twitter remained one of the only sources of information coming out of the country. Twitter became so important during this time "its role even resulted in calls among some in the Bush administration for Twitter to be nominated for a Nobel Peace Prize" (BBC News).

There is no doubt in my mind that Twitter will be around in five years to celebrate it 10th birthday and maybe even its 25th there-after.

Scrutinizing portions of the new Homestead Law

Interest in the new homestead law continues at peak levels and we're still trying to decipher the meaning of many of the statute's section. Below we share our thoughts on the definition of "Declared homestead exemption" found in Section 1 of the new law. Our comments are in italics:

“Declared homestead exemption”, an exemption in the amount of $500,000 created by a written declaration, executed and recorded pursuant to section 5 (the section of the law that contains the mechanics of filling out the form); provided, however, that:

(1) with respect to a home owned by joint tenants or tenants by the entirety who are benefited by an estate of homestead declared pursuant to section 3 (regular homestead), the declared homestead exemption shall remain whole and unallocated, provided that the owners together shall not be entitled to a declared homestead exemption in excess of $500,000; (joint tenants and tenants by the entirety own “an undivided interest” in the property. That means each co-tenant owns the entire property subject only to the other co-tenant’s like interest. The “whole and unallocated” language means that each co-tenant has access to the full $500,000 exemption, but that’s also the total amount they can claim cumulatively).

(2) if a home is owned by tenants in common or trust beneficiaries, the declared homestead exemption for each co-tenant and trust beneficiary who benefits by an estate of homestead declared pursuant to said section 3 (regular homestead) shall be the product of: (i) $500,000; and (ii) the co-tenant’s or trust beneficiary’s percentage ownership interest; (Tenants in common and trust beneficiaries each own a percentage share of the property. For them, the maximum homestead exemption they may claim is their ownership percentage times the full exemption. If two tenants in common each own a 50% interest, the largest homestead exemption either could claim would be $250,000).

(3) except as provided in clause (4)(which is the following paragraph), each person who owns a home and who is benefited by an estate of homestead declared pursuant to section 2 (the elderly homestead) shall be entitled to the declared homestead exemption without reduction, proration or allocation among other owners of the home; and (meaning that every co-owner who declares an elderly homestead gets the full $500,000 exemption, regardless of how many other co-owners there are).

(4) separate estates of homestead may be declared pursuant to sections 2 and 3 on the same home (co-owners may file homesteads separately; they need not use the same form. Registered Land, however, may have different requirements), and in such event:

(5) (i) if the home is owned by tenants in common or trust beneficiaries, the declared homestead exemption for each co-tenant and trust beneficiary who benefits by an estate of homestead declared pursuant to section 3 (regular homestead) shall be calculated in the manner provided in clause (2)(co-owners allocate the $500,000 exemption amongst themselves based on their ownership percentage in the property), and the declared homestead exemption for each co-tenant and trust beneficiary who benefits by an estate of homestead declared pursuant to section 2 (elderly homestead) shall be calculated in the manner provided in clause (3); or (meaning that every co-owner who declares an elderly homestead gets the full $500,000 exemption, regardless of how many other co-owners there are).

(ii) if the home is owned by joint tenants or tenants by the entirety, the declared homestead exemption for the owners together shall be the sum of $500,000 multiplied by the number of declarations recorded pursuant to section 2 (elderly homestead), plus $250,000; (not sure where this comes from – perhaps the automatic $125,000 exemption doubled?)provided, however, that the homestead exemption under this subclause shall remain whole and unallocated among the owners; and provided further, that no owner who declares a homestead, acting individually, shall be entitled to claim an exemption of more than $500,000; and (what about joint tenants and tenants in common who claim an individual homestead exemption under the regular homestead? The calculation of this paragraph - $500,000 times the number of elderly homesteads – would yield zero if no elderly homesteads were involved. I’m not sure that’s the meaning or the intent, but that’s how I read it right now).

(6) the calculation of the amount of homestead exemption available to an owner shall not sever a joint tenancy or tenancy by the entirety.

As you can see from the above discussion, this single definition paragraph yields numerous questions that have no clear answers. Any opinions from our readers would be most welcome.

Evacution Day

We'll take a break from our Homestead-related posts with a bit of history today:

March 17th is Evacuation Day which commemorates the evacuation of Boston by the British Army in March of 1776 during the early phases of the American Revolution. The initial battle of that war happened almost a year earlier, on April 19, 1775 in Lexington and Concord. After that, the colonial militia mobilized and ringed Boston, the garrison town the British inhabited. On June 17, 1775, the two forces fought a costly engagement that became known as the Battle of Bunker Hill. That was followed by a stalemate around Boston that persisted through the winter of 1775-76. During that same winter, Henry Knox, a 25 year-old Boston book seller who read a lot of books on artillery, volunteered to retrieve 50 cannon from Fort Ticonderoga, a British fortress that had been captured early in the war. Knox's expedition dragged the cannon all the way from Ticonderoga (on the western shore of Lake Champlain) to Boston where the colonial militia secretly emplaced the guns on Dorchester Heights. When the British awoke, they found that the colonial artillery made Boston indefensible, so they boarded their ships and sailed to Nova Scotia, never to return.

It was in 1901 that the city of Boston made Evacuation Day an official holiday. While the exact date the British withdrew in 1776 was in the month of March, it wasn't the 17th. For other reasons, the Boston city administration of that time chose March 17th as the holiday. For a full account of that, check out the Mass Moments website.

Questions about new homestead

Early in my law school career, a professor declared "law school is just a course in advanced reading." The same might be said about the new homestead law. Many questions have arisen. Upon reflection, most of them are answered by the statute if one reads it closely enough. But that takes some time and reflection. In the meantime, here's a sampling of the questions that have been posed so far today, the first day of the new statute:

When spouses come in together and one is over 62 and the other is not, should they execute a single form or file separately? What should they do when the younger spouse reaches age 62?

A spouse comes in alone, but the deed that establishes title to the property shows that it is owned by “husband and wife as tenants by the entirety,” should a homestead signed only by the spouse who is present be recorded or should it be rejected pending second spouse’s signature?

One spouse already has an elderly homestead on record. The other spouse has just reached age 62 and comes in to file a new homestead. May the younger spouse file alone or do both have to file the new form

Are there any additional requirements for Registered Land? Guidance from the Land Court is expected imminently although we do understand that a Registered Land Declaration of Homestead that’s placed on a Nominee Trust must be accompanied by the Trustee’s Certificate.

If co-owners are declaring a homestead using a single form that both have signed but only one of their signatures is acknowledged, may the homestead be recorded? Section 5(a) says “each owner to be benefited by the homestead” must “sign and acknowledge” but a deed or mortgage by co-owners that’s signed by both that has only one signature acknowledged is recordable.

New Homestead Law takes effect tomorrow

The long-awaited major revision to Massachusetts General Law chapter 188 (Declaration of Homestead) takes effect tomorrow. We've posted the full version of the new law on our website. In seeking to clarify many of the ambiguities of the old law, the new statute is quite extensive and takes several readings to begin to fully digest. The Secretary of State has posted a Question and Answer pamphlet on his website and I plan to post a concise fact sheet on the new law to the lowelldeeds site in the coming days.

In the meantime, new forms (there are two: one for property owned by individuals and another for property owned by a trust) are available on the Secretary of State's website in PDF version that can be completed on your computer and then printed. Here at the Middlesex North Registry of Deeds, most of our Homestead customers just walk in and complete the form here, so we have slimmed down versions of the regular homestead and the trust homestead here at the registry and on our website.

New Homestead Law begins this Wednesday

A story in today's Globe reminds us that the new Declaration of Homestead Law enacted by the state legislature last fall takes effect this coming Wednesday, March 16, 2011. The full text of the new law is available HERE and I've previously written about it HERE and HERE.

We'll be posting additional information about the new Homestead and a revised Homestead form on the lowelldeeds website by Wednesday, so please check back for the latest news on this topic.

End suburban subsidies

In an Op-ed in Thursday's Globe, Harvard economist Ed Glaeser argues that the time has come to end public subsidies of suburban single family homes. Glaeser points to the home mortgage interest deduction and policies of Freddie Mac and Fannie Mae as being not only injurious to urban dwellers, but two central elements in transforming our country into a "foreclosure society" and not an ownership society.

Buyer expectations create impediment to home sales

An article by Kenneth Harney of the Washington Post News Service in the March 7, 2011 edition of Banker and Tradesman (not available free online) suggests that rising expectations of home buyers are condemning many potential home sales to failure. Anecdotally, brokers tell of buyers expecting the amenities of a $500,000 house in one selling for less than $200,000 including things such as granite countertops and stainless steel appliances. The author attributes these changing expectations to a couple of things. One is that down payment requirements have risen substantially ("the median down payment . . . has jumped to 20 percent compared to 'close to zero' five years ago"). With people stretching just to make the down payment, they have little money available for after-purchase renovations or fix-ups. The second factor is cultural. With the rising popularity of cable TV programs such as Home and Garden TV, more people have set their expectations of features in a home based on television programs rather than real life. Whatever the cause, if this perception is true it's too bad, because the last thing needed in this depressed market is more reasons for people not to purchase homes.

Techie Action Dolls...R U Kidding?

Honest...the world never ceases to amaze me. I couldn't make this stuff up!


















Me: This morning I read an article in the New York Times about a company called M.I.C. Gadgets that is manufacturing actions dolls for sale.

Him: Yeah, so whats the big deal? Action dolls have been around for years, Captain America, GI Joe, the Ninja Turtles...

Me: Yeah, but all those figures represented characters with super-powers.

Him: Your Point?

Me: M.I.C. Gadgets is venturing into a new area of action figures...an area where the characters do not have super-powers

Him: I'm almost afraid to ask...OK go ahead, what area?

Me: The technology area.

Him: Are you kidding? M.I.C. is making action dolls that look like techie people? Like whom?

Me: How about Steve Jobs for one. M.I.C. Gadgets is making an action doll that looks like the Apple CEO.

Him: Oh, I get it. I can just hear M.I.C.'s advertisement for the Steve Jobs doll..."Look up in the sky of Cupertino...its a nerd..its a brain...No its AppleMan. Faster that a Pentium Four processor, more powerful than a Power Mac G5, able to hawk products at a hyped event. Who disguised as Steve Jobs, mild mannered CEO for a major Silicon Valley computer company fights the unending battle against Microsoft Windows and for the American way".

Me: Well, I don't know if it will be exactly like that...but.

Him: Tell me, what other action techie dolls are they making?

Me: M.I.C. Gadgets is also producing a Mark Zukerberg action doll.

Him: What?! You mean the guy who invented Facebook and was in that movie getting sued?
Oh I can hear that Ad too...Dr Mark Zukerberg a techie geek. Searching for a way to tap into the social desires that all humans have. Then an accidental overdose of friending others alters his body chemistry. And now when Mark Zuckerberg grows angry or is unfriended a startling metamorphosis occurs. The creature becomes driven by money and is pursued by an army of lawyers.

Me: Well, that might be a little much...but.

Him: Hey, is MIC going to do a Steve Gates action doll? I can hear...

Me: Why don't we forget that for now.

Lowell Sun editorial of future of Superior Courthouse

Yesterday's Lowell Sun had an editorial urging the state's Division of Capital Asset Management to get an early start on finding a new use for the Middlesex Superior Courthouse in Lowell which is the current home of the Registry of Deeds. The state expects to break ground for the new Judicial Center in the summer of 2012 with the building taking 30 months to complete. That would mean the Superior Court operations would be ready to move in early 2015. Presumably the registry of deeds would also vacate this building at the same time. Since we have digitized all of our records, the amount of space needed for the registry is relatively modest as are the requirements of such a space. The big question will then be what to do with the vacant courthouse? The fear of many is that it will remain vacant and slowly deteriorate which is why it is important to begin and continue the conversation about it's reuse. If people are thinking and talking about the building, it increases the odds that someone will find a new use for it.

Techie Shorts

The technology world always fascinates...here are a few of the big stories of last week:

This has to be a first...a book publisher named OR Books is collecting raw tweets posted during the recent revolution in Egypt. OR Books is compiling these 140 character nuggets of information into a book titled...Tweets from Tahrir. What an interesting idea...I'll bet this is not the last time this is done.

A few weeks ago it was revealed that several retailers beat the google algorithm. These companies found a way to make themselves the top results of millions of google searches by fooling the search giant's system. When google discovered the problem they threaten to pull the retailers from all queries. Last week google announced it was changing its algorithm to prevent future manipulation.

With the release of the iPad Two this Friday the war for tablet supremacy is heating up. Right now the three big in the market are the Xoom, iPad and Galaxy. The public is rating these tablets by size, weight, speed, resolution and of course price. Apple is controlling close to 90% of the tablet market right now...the competition needs to price slash if it wants to make a run at Apple.

The space shuttle Discovery is finishing up its last mission and will arrive back on earth, Wednesday. In 27 years Discovery has traveled 39 missions and covered 150 million miles in 365 days...truly an amazing feat, especially considering most of the coffee makers I buy only last a year.

Judicial Center Construction to begin this summer

The Lowell Sun reports today that work will commence on the city's new Judicial Center this summer. Expected to cost $175 million dollars and take 30 months to construct at the end of Jackson Street, the new facility will house all court operations in Lowell including Superior, District, Juvenile, Housing and Probate. The article also reports that the city's state house delegation is arranging a meeting in the coming days with the Department of Capital Asset Management (DCAM), the state agency responsible for all state buildings, to discuss the future use of the current Superior and District Courthouses.

Finding the appropriate penalty for problematic lenders

Today's New York Times reports that federal regulators are having trouble reaching an agreement on the size and ultimate use of fines that will be imposed on lenders that short-cut foreclosure procedures. While the banks seem amenable to negotiating a dollar amount for this fine - $20 billion is the number now being floated - there is a dispute about how that money is to be used. This article claims that some want to use the funds to assist homeowners who are underwater on their mortgages in an effort to catapult the housing market into better times. Those who disagree with this strategy contend that bailing out people who might otherwise be able to stay current on their loans would provide a negative incentive - people might be less likely to keep paying in the hopes of obtaining a bailout.

How to aid the revival of the housing market is a very important issue. Right now in America, there are 2 million homes in foreclosure and another 2 million homeowners who are behind in their payments. Fully one-fifth of all home loans exceed the value of the homes. While there has been a significant decrease in the number of foreclosures initiated in the past five months, some suspect that's only caused by banks deferring foreclosures because of a variety of legal difficulties. The best remedy for this problem would be a reasonable increase in the price of housing which depends on the continuation of low interest rates and the continued growth of the economy.

iPad Two Unveiled Today

Excited!
You bet I'm excited.
Apple unveils the iPad Two today and the anticipation is incredible (at least for me anyway).

In a sneak preview CNN did this great piece on the iPad/iPad Two and its place in the technology world.

February statistics

As we do at the end of each month, here's a snapshot of recording statistics (entire registry district) for certain key documents for February 2011 compared to February 2010:

The number of deeds recorded was down 15%, from 337 in Feb 2010 to 288 in Feb 2011.

Mortgages were up 9%, from 713 in Feb 2010 to 774 in Feb 2011.

Foreclosure Deeds were down 49%, from 45 in Feb 2010 to 23 in Feb 2011.

Orders of Notice were down 62%, from 141 in Feb 2010 to 53 in Feb 2011.

Academy Awards thank Lowell

At Sunday night's Academy Awards, Christian Bale won the Oscar for Best Supporting Actor for his portrayal of Lowell boxer Dickie Eklund. The Fighter short right here in Lowell, home of the Middlesex North Registry of Deeds also garnered an award for Melissa Leo for Best Supporting Actress.

This is a special movie for those of us at the registry of deeds...on August 10 and 11, 2009 the cast spent two days filming at our work place, the Lowell Superior Courthouse.

Below is Christian Bales' heartfelt acceptance speech in which he thanks the City of Lowell at the Academy Awards...