Community Preservation Act update

The North Weekly section of this Sunday's Globe had a story about local reaction to changes made in the state's Community Preservation Act.  While the new amendment bans the use of CPA funds for the installation and upkeep of artificial turf fields (something that's become quite popular for use on high school football fields) it does still permit the funds to be used for site prep and drainage for such fields.  The sting of this new limitation is mitigated somewhat by the infusion by the state of an additional $25 million into the CPA account.  That account, which is normally funded through a document surcharge collected at the registry of deeds, has not kept up with expenditures because of the lengthy real estate slump.

Here are the Middlesex North totals of CPA funds collected since the fund began in 2002:

• 2002 - $2,406,020
• 2003 - $2,864,240
• 2004 - $1,895,030
• 2005 - $1,703,090
• 2006 - $1,421,560
• 2007 - $1,276,270
• 2008 - $1,068,900
• 2009 - $1,251,800
• 2010 - $1,953,360
• 2011 - $1,106,980  

A "backdoor" Lis Pendens

Last week I wrote that the registers of deeds association will be undertaking an update of the Massachusetts Deed Indexing Standards in the coming months.  One thing that prompted this was a paragraph in a recent unpublished Land Court decision regarding the recording of a certified copy of a complaint at the registry of deeds.  The name of the case and of the registry of deeds involved aren't relevant to my story so I'll leave them out.

The barest facts of the case are as follows: The parties disputed the ownership of marital real estate that was to be divided pursuant to a divorce decree.  One of the parties started a Land Court action regarding this real estate that was independent of the divorce case already pending.  Before any action could be taken in this new lawsuit, the initiating party recorded a certified copy of the complaint that launched the lawsuit at the registry of deeds.

The Land Court judge not only dismissed the case, but also ordered the complaint to be stricken from the records of the Registry of Deeds and that all mention of it, in marginal references and anywhere else, also be stricken.  As grounds for this order, the judge held that by recording the certified copy of the complaint, the plaintiff had essentially established a Lis Pendens on the property (notice of a suit regarding the property) and in doing so had created a cloud on the title.  Doing this without the judicial order required to establish a Lis Pendens was improper.

Many registries have taken a fairly liberal position regarding what may or may not be recorded, reasoning that merely recording a document doesn't enhance its legal significance.  Because of this case, however, I expect that we will become more rigorous in deciding what to allow on record.  

Lowell Festival starts tonight

The annual Lowell Folk Festival begins this evening with a parade beginning at JFK Plaza at 6:30 pm.  The procession will consist of representative of every ethnic group in the city carrying the flags of their ancestors and will travel down Merrimack to Kirk Street to Boarding House Park where, after a short ceremony, the music will begin.  The Festival is free and lasts all weekend.  It includes music, craft demonstrations and ethnic food vendors.  A full schedule is available at the official Festival website.

Update to Deed Indexing Standards is planned

Yesterday I met with some fellow registers of deeds from across the Commonwealth.  Among the topics of discussion was the Massachusetts Deeds Indexing Standards.  Initial work on this document began back in 1997 with the recognition that even if all registries in the Commonwealth adopted the same computer system (which we haven't yet), users would still get variable results unless we were entering data in similar ways.  After much discussion and analysis by registry staffs and users, the first version of the Indexing Standards was made public in time for Y2K.  That first version dealt almost exclusively with how names would be entered into the computerized index.  Over time, the Indexing Standards have evolved into a type of recording handbook.  Our last update took effect on January 1, 2008 so it is undoubtedly time to critically review the existing document, to change it where the law or practice has changed and to add new things to it (such as a section on electronic recording).  Our process will be a deliberate one so there is no timetable for when an update might hit the street.  January 1, 2013, while aggressive, might be a good target.  In the meantime, please take a few moment to review the existing standards and make note of any changes or additions that should be considered.  Use the comment feature here or email me directly to share your thoughts.

Getting Used to a New Operating System

The new computers installed at the Middlesex North Registry of Deeds last week run on Windows 7. My computer at home uses Microsoft Vista (don't laugh) so this is my first experience with the Windows 7 OS.

Honestly,...I like it. Of course, Windows 7 takes some getting used to, just like anything else that is new.

Microsoft Office was also upgraded during the "refresh" on some of the internal registry computers and it needed to be. We were running Office 2000, which is several generations old.

For most of us the new version of Office is a new look, but the more we play with it the more we like it. One thing in particular that I noticed, MS Access looks completely different in the newer version, which sure makes my database work...shall we say interesting.

Keep in mind... from the public's point of view Windows 7 has only minor effects on how our system displays or operates.

Mid-month statistics for July

Well, not quite mid-month.  More like three-quarter month.  Here's a comparison of the number of various document types recorded at the Middlesex North Registry of Deeds during the first three weeks of July in 2011 and in 2012:

Deeds: July 1 - 22, 2011 there were 306; same period in 2012 there were 339, an 11% increase
Mortgages: July 1 - 22, 2011 there were 510; same period in 2012 there were 761, an increase of 49%
Orders of Notice: July 1 - 22, 2011 there were 39; same period in 2012 there were 41, a 5% increase
Foreclosure Deeds: July 1 - 22, 2011 there were 28; same period in 2012 there were 25; an 11% decrease.

Refunds from Capital One

The number of court executions recorded here by the sheriff's department has risen substantially during the financial crisis.  The plaintiffs in most of those cases are credit card companies and one of the most frequent names we see is Capital One.  That company's name came up in a different context recently when it entered into a consent decree with the nearly one-year old Consumer Financial Protection Bureau.

The CFPB brought an action against Capital One peddling credit card "add-ons" such as fraud monitoring and "payment protection" to consumers in a deceptive manner, sometimes leading customers to belief that paying for such services was a mandatory provision of holding such a credit card and at other times selling the services to people who could never collect on them.  One example was a service that would defer twelve monthly minimum payments in the event of unemployment or extreme illness.  The sale people for Cap One were selling this service to those who were already unemployed or disabled and who were, by definition, ineligible for such protection.  Cap One was happy to take there money.

In this consent decree, Capital One will refund $140 million to 2 million card holders and will pay an additional fine of $25 million to the government.  Card holders need not apply for the refund; it will come automatically.  To those still holding a Capital One card, it will come as a credit to the existing card and to those without a card, it will come in the form of a check.

Refresh Continues

Our computer "refresh" project is moving along. Yesterday was a very productive day here even though the registry lost power twice for briefs times. The onsite IT tech along with the registry's MIS Director solved many "nagging little" problems create by the installation. We completely expected small issues like these during a computer replacement project of this size.




Here is a quick project status update:

All of the Public Access terminals are up and working fine.

We are expecting new printers to be delivered later today, but for now all the older ones used by the public and employees are connected.

Email functions have been set up.

The resolution on both public and employee computer monitors have been adjusted to optimize the ACS program.

The "test" recording terminal is now working. It is a "super station" which means it is attached to a scanner.

Still remaining to set up are the scanners and "stand alone" Recording Terminals.

Uninterruptible Power Supply

When the apocalyptic lightning and rain storm blew through Lowell shortly after 1 pm today, the registry of deeds lost power for about 10 seconds.  First the lights flickered but then they and everything else powered by electricity went out.  It was only for the aforementioned 10 seconds, but that was long enough to shout everything down.  Everything that is except for our recording terminals and scanners.  You see, we work in a very old building in a neighborhood with sketchy electrical service so power outages, mostly of short duration, are not uncommon. 

In response to past electrical outages, several years ago we obtained a dozen "uninterruptible power supplies" or UPS's, each sufficient to run a computer and associated peripherals.  These UPS's don't provide power forever but they do give you a few minutes to finish what you're doing and shut down your machine gradually.  This is important for us because in our recording process, nothing is saved until we complete all data entry.  It is only then that we click "save" which causes the new data to be written to our database and recording information (book, page, time of recording) to be assigned.  If we were near the end of the recording process but not yet at the "save" stage and we lost power, all would be lost and we'd have to begin anew. 

Today when the power went down we stayed up and no data was lost.  More importantly, no confusion was created about what had or had not made it on record.  Afterwards I overheard someone say "I guess this is why have these UPS's."

Computer Refresh, Day Two

Today is the second day of the "computer refresh" at the Middlesex North Registry of Deeds.

The goal of the refresh is to upgrade and standardize computers within the registries of deeds system. We divided our refresh project into two phases. During phase one, which was completed yesterday, the SEC IT Department replaced all Public Access computers in the hallways and Research Room.

Hopefully the work will be finished tomorrow.

LIBOR

According to Wikipedia, LIBOR is "The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks."  LIBOR has been much in the news lately, because of recent revelations that British banks routinely gamed the system by reporting inaccurate numbers to the reporting agency.  The banks reported interest rates lower than they were actually paying which was intended to make them look healthier than they were (the stronger the bank, the lower the interest rate charged to it).  Ironically, this manipulation worked in favor of some American home owners whose adjustable rate mortgages are tied to the LIBOR rate.  With the LIBOR rate being kept inaccurately (and perhaps illegally) low, interest rates on some adjustable rate home mortgages did not jump as much as they might have.  Of course, the manipulation also harmed others who had investments that were harmed by the lower rates.

LIBOR is a term that appears in thousands of mortgage recorded here at the Middlesex North Registry of Deeds, usually in Adjustable Rate Riders.  For those unfamiliar with it and for others whose home mortgage interest rates are controlled by it but who never bothered to read the fine print, here's the relevant LIBOR language from a mortgage recorded back in January of 2004.

 

Adjustable Rate Rider

(1-year LIBOR Index – Rate Caps)

Interest Rate and Monthly Payment Changes

Change Dates: The initial interest rate I will pay may change on the first day of January 1, 2007 and may change on that day every 12^th month thereafter.  Each date on which my interest rate could change is called a “Change Date.”

The Index: Beginning with the first Change date, my interest rate will be based on an Index.  The “Index” is the one-year London Interbank Offered Rate (“LIBOR”) which is the average of interbank offered rates for one-year US dollar-denominated deposits in the London market, as published in the Wall Street Journal . . .”

Calculation of Changes: Before each Change Date, the Note Holder will calculate my new interest rate by adding TWO AND ONE-FOURTH percentage points (2.250%) to the Current Index. . . .

Limits on Interest Rate Changes: The interest rate I am required to pay at the first Change Date will not be greater than 6.000% or less than 2.250%.  Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than TWO% from the rate of interest I have been paying for the preceding 12 months.  My interest rate will never be greater than 10.000%.

Increase in Electronic Recording Volume

During the second quarter of 2012, the number of documents being recorded electronically at the Middlesex North Registry of Deeds has increased considerably.  By way of background, Back in 2005 Middlesex North became the first registry of deeds in Massachusetts to offer full electronic recording services.  Gradually, other registries have activated the service and so now, about half of the state's 21 registries of deeds offer electronic recording.

With electronic recording, authorized customers scan the documents that are to be recorded and then upload the scanned images and data they enter about those images to a secure website.  At the appropriate time, the authorized customer clicks the "send to the registry" button and at the registry, a notice appears on our computers that an inbound recording has arrived.  We open the electronic package and review the submitted documents in the same way we do documents presented in person for recording (signed, notarized, land in this district, etc).  If all is in order, we click the "record" button and in a second or two, the document is recorded in our records, an electronic copy of the recorded document plus a receipt bounces back tot he sender, and the fees are paid through an electronic transfer into our bank account.  By my measurement, the amount of time spent processing an document submitted in the traditional way (by bringing it to the registry) requires 10 minutes of our time while processing an electronically submitted document takes only 1 minute.  In that way, it is a substantial efficiency.

Most of our earliest electronic recording customers were large national institutions that were already using the service in other states.  Over time, however, more and more local attorneys are using it.  Electronic recording is a huge time saver for them, too.  While the attorney or law office staff does have to scan the document and enter some data, neither the document or any person associated with it has to leave the office to go to the registry.  Everything from execution to recording to disbursement of funds to filing away the paperwork can be done all at once.

Our volume of electronic recording relative to all documents recorded has steadily risen over time.  By the end of 2011 and into the first quarter of 2012, at least 30% of our daily recordings were submitted electronically.  For the three months covered by April, May and June of 2012, however, that number has risen to 35%.  Our biggest day ever for electronic recording was on June 29, 2012 when out of a total of 793 documents recorded for the day, 373 were electronic, accounting for 47% of the total.  Of the electronic recordings that day, 18 were deeds, 58 were mortgages, 31 were mortgage discharges, and 266 were other types of documents (and having helped record many of them that day, I can say most were assignments of mortgages).

As electronic recording rolls-out to the remaining registries of deeds in the state and as local real estate people, especially those working for municipalities like tax collectors, get more comfortable with the technology, I believe the volume will rise to close to 50% of all transactions.   

 

Presidenital Peas

Thomas Jefferson is my favorite founding father...AND after twenty years of idleness, I decided to plant a vegetable garden this year.

I know what you're thinking...What in the name of Gertrude Jekyll do these two things have to do with each other?

Let me explain...not only is Jefferson the author of the Declaration of independence, he was also an avid gardener...like me.

Of all the vegetables in Jefferson's garden his favorite was the Pea. Throughout his life, Jefferson took fastidious notes and kept a detailed account of the many vegetables planted in his garden. According to the Massachusetts Historical Society "Peas are mentioned frequently, in fact, two-thirds of all the pages of the Garden Book (44 of 66 pages) include Jefferson's notes about various types: frame peas, Hotspur peas, cowpeas, marrowfat peas, black eyed peas, and Prussian blue peas".



Some historians believe Jefferson's interest in peas was more than just epicurean and actually sprouted (excuse the pun) from a local contest. The Monticello Association website states that Jefferson often participated in an annual contest "to see which farmer could bring to the table the first peas of the Spring".

In honor of America's greatest founding father I also planted peas in my vegetable garden this year. Truthfully, Jefferson wasn't my only motivation...the fact is I love peas too, especially fresh ones.

My vegetable garden is only 30'X3'. This small size limited me to only one variety of snap pea, nothing compared to Jefferson's varietal indulgence.

New Rules for Mortgages

The Consumer Financial Protection Bureau on Monday issued new rules for residential mortgages according to an article in today's New York Times.  The two most significant parts of the new rules are (1)"within three days of applying for a loan, consumers would receive a loan estimate that outlined the terms, including how much interest they would pay, how that might shift over the life of the loan and the highest loan amount that consumers could face." and (2) "the rules would make lenders provide more information about potential closing costs at least three days before closing. The five-page closing-cost form would allow borrowers to avoid any surprise payments at the signing table."

A full explanation of the new rules is available on the CFPB website.

Play Nice

When I was a little kid heading out to play my mother used to say to me "Anthony play nice with the other kids". As I got older I discovered this was good advice to follow even as an adult.

But, I get the impression Microsoft CEO Steve Ballmer's mother never gave him the same advice or he didn't listen to it.

Steve is talking tough to the other kids, I mean techie companies.



Here is a personal story illustrating how I learned playing nice was good advice, (truthfully, I made it out).

A long, long time ago, when I was a kid, this other little kid (I'll call him Richie Cunningham) came down to the park with a tennis racket. Before I knew it he and I were exchanging "words". Why, because he had a tennis racquet and I didn't. As our "disagreement escalated, Richie called his friend over (I'll call him Potsie).

Just then, for some reason I stopped being a jerk and said to myself..."Tony, what are you doing". You don't even like tennis. Why do you care if Richie and Potsie have a tennis racquet and you don't? Remember what ma said, Anthony (she called me that until the day she passed) play nice with the other kids".

But not Steve Ballmer, he must've missed this advice. He doesn't want to play nice...especially with Apple.

Everyone knows Microsoft became a technology giant by dominating the software market, not developing hardware. But now, that's not good enough. Ballmer wants Microsoft to have what the "other kids" have. Ballmer wants to challenge Apple's iPad, Apple's iPhone (hinting), and about every other thing Apple has. Basically, Ballmer wants Apple's tennis racquet.

Think I'm kidding about the tough talk?

Check out some of these quotes from "the CEO" while talking about Microsoft's new Surface tablet and future developments by his company:

"We are not going to leave any space uncovered to Apple.”

"We are not leaving any of that to Apple by itself. Not going to happen. Not on our watch.”

"“We are not going to let any piece of this [go uncontested] … not the consumer cloud. Not hardware software innovation.”

Wow, these sound like fightin' words to me.

Hey, whatever happened to playing nice with the other kids Steven?

Overhaul of Home Mortgage Market underway

The New York Times reports today that the newly created Consumer Financial Protection Bureau is in the process of over overhauling the way the home mortgage business operates with a host of consumer-friendly regulations that will make borrowers better aware of the liabilities and obligations that come with their proposed loans.  The story reports that organizations representing lenders are generally in favor of most of the reforms which is a good thing. 

While it's natural to think that stricter regulations might tend to suppress the market, the fact is that the great majority of home owners have little idea of some of the basics of real estate and mortgage law.  The more that lenders are required to explain things clearly, the less likely that borrowers will get into difficulties that lead to things like foreclosures and other distressed sales.

Mid year stats for Lowell and district towns

Here are some recording statistics for the city of Lowell and then for the nine other communities in the Middlesex North Registry of Deeds district:

In Lowell, there was a 2% increase in the number of deeds recorded in the first half of 2012 when compared to the first half of 2011 (692 in 2011 v 704 in 2012);

There was a 19% increase in the number of mortgages recorded in the first half of 2012 when compared to the first half of 2011 (1049 in 2011 v 1249 in 2012);

There was an 8% decline in the number of foreclosure deeds recorded in the first half of 2012 when compared to the first half of 2011 (107 in 2011 v 108 in 2012);

There was an 11% decline in the number of orders of notice recorded in the first half of 2012 when compared to the first half of 2011 (168 in 2011 v 150 in 2012);


In the nine towns in the district, there was a 20% increase in the number of deeds recorded in the first half of 2012 when compared to the first half of 2011 (1707 in 2011 v 2055 in 2012);

There was a 38% increase in the number of mortgages recorded in the first half of 2012 when compared to the first half of 2011 (4161 in 2011 v 5752 in 2012);

There was a 17% increase in the number of foreclosure deeds recorded in the first half of 2012 when compared to the first half of 2011 (95 in 2011 v 111 in 2012);

There was an 9% decline in the number of orders of notice recorded in the first half of 2012 when compared to the first half of 2011 (225 in 2011 v 204 in 2012);

"I paid my mortgage. Please return my deed."

Here's a question I received via email this morning.  It's a question that is asked quite frequently:

Hello - I recently paid off my mortgage and received a release and discharge. Can you please send me my deed?

Here's the response I sent:

Congratulations on paying off your mortgage.  It's a common misconception that the deed to the property is somehow held as security until the mortgage is paid.  That's not the case.  When you purchased the house, you should have received the original deed which conveyed the property from the seller to you.  Many people don't end up with the original deed for a variety of reasons - the lawyer may have never sent it or it may have been otherwise misplaced.  In any case, the registry would not have retained the original: we just make the official copy and then return the original to whomever recorded it.

That said, don't worry if you don't have the original.  I have attached an official copy from our records which should be just as good for almost all purposes (and if you need it for some court or other legal proceedings, you can always obtain a certified copy from us which is just as good as the original).

As for the mortgage, the way it works is when you sign the mortgage at the time you borrowed the money, you did convey an interest in the property to the lender.  That interest was the right to seize and sell the property if you defaulted on the terms of the note.  Since you have now paid off the loan, the interest that you conveyed to the bank is extinguished.  The way that is shown in our records is by the lender recording a discharge of mortgage which we have linked to the mortgage.  Taken together, the two documents show that the mortgage is no longer operative.

The assumptions presented in the above question are reflective of how most non-lawyers (and others not in the real estate business) understand the operation of a mortgage.  To the extent we can help educate folks on how the system actually works, I believe we do everyone a useful service.

June and mid-year statistics

At the end of each month we report the total number of several major document types recorded for the month and compare those numbers to the totals for the same month in the prior year.  Here are the results for June:

There was a 20% increase in the number of deeds recorded, rising from 494 in June 2011 to 593 in June 2012.

There was a 40% increase in the number of mortgages recorded, rising from 883 in June 2011 to 1238 in June 2012.

There was a 19% decline in the number of foreclosure deeds recorded, dropping from 42 in June 2011 to 34 in June 2012.

There was a 19% decline in the number of orders of notice recorded, dropping from 64 in June 2011 to 52 in June 2012.

As for the first half of the year, here are the statistics for the same categories:

There was a 15% increase in the number of deeds recorded, rising from 2399 in the first half of 2011 to 2759 in the first half of 2012.

There was a 34% increase in the number of mortgages recorded, rising from 5210 in the first half of 2011 to 7001 in the first half of 2012.

There was a 3% increase in the number of foreclosure deeds recorded, rising from 202 in the first half of 2011 to 209 in the first half of 2012.

There was a 10% decline in the number of orders of notice recorded, dropping from 393 in the first half of 2011 to 354 in the first half of 2012.