Foreclosure auction dates

A customer emailed the other day to ask if we had a list of the dates of upcoming foreclosure auctions.  I said we did not and added that I knew of no such list.  The only way to compile such a list would be to review the legal notices in the local newspaper each day and extract the date, time and address of each auction and I know of no one that does this.  But such a list would be of considerable interest to a wide variety of people so I decided that perhaps we here at the registry should maintain such a list.  I've only started considering the logistics of that, but I'm thinking of something simple like a public Google calendar or a calendar widget on this blog on which we would add each new foreclosure auction date based on each day's legal notices in the local newspaper.  I'll keep everyone informed of our progress on this but if anyone has any suggestions for an app to use, please leave a comment or email lowelldeeds[at]comcast.net.

Greater Lowell Chamber of Commerce Legislative Breakfast

This morning I had the opportunity to serve as moderator at the Greater Lowell Chamber of Commerce Legislative Breakfast at Lenzi's in Dracut.  The keynote speaker was Secretary for Administration and Finance Glen Shor who was appointed to that position just weeks ago.  Prior to his appointment as Secretary, Shor served as Executive Director of the Massachusetts Health Insurance Connector Authority.

After reviewing the Commonwealth's fiscal affairs since the onset of the Great Recession, Secretary Shor then discussed Governor Patrick's recent proposal to increase funding for transportation and education and to pay for that increased funding with a package of tax increases and tax cuts.  The Governor has proposed increasing the income tax rate from 5.25% to 6.25%, to double the personal exemption, to eliminate many deductions, and to decrease the sales tax to 4.5%.  The purpose of these cuts is to pay for a variety of programs that the Governor believes are essential to the longterm financial stability of the Commonwealth and its citizens.

Secretary Shor repeatedly emphasized that this was not a dictate from the Governor, but the start of a conversation with the legislature and the public on how Massachusetts should look and operate in the future and about how that should be paid for.  It didn't take long for that conversation to begin this morning since Secretary Shor was followed to the podium by State Senators Eileen Donoghue and Barry Finegold and State Representatives Kevin Murphy, Dave Nangle and Tom Golden (all of Lowell) and Marc Lombardo of Billerica.  Their responses varied but no one heartily endorsed the existing proposal.  It will be an interesting and extended conversation.

Finally, congratulations the the Greater Lowell Chamber of Commerce for a great event this morning that was well attended by the area business community.

Electronic signatures

Last week I received the following email:

Can you please advise if Northern Middlesex county will recognize an electronic signature as an “original” to record an easement or does it still need to be a traditional “wet” signature?

I asked the sender to fax or email a copy of the document that she sought to record.  I haven't received anything yet but the inquiry got me thinking about the issue of "electronic signatures."  A number of documents we receive and record do not contain a so-called "wet" signature.  By "wet" signature, I mean a human being using pen and ink to make a mark on paper.  The documents we see that don't have this type of signature contain a signature facsimile, created by a rubber stamp, a computer printer, or by some other means. 

I do think that the Uniform Electronic Transactions Act (Mass General Laws chapter 110G) permits a purely electronic signature, something similar to what results when you pay for something at a retail establishment and sign an electronic pad with some kind of stylus or inkless pen.  What is less clear is how such a signature would be acknowledged, particularly because the Massachusetts Notary Public regulations require the notary to include his or her stamp on the document to complete the notarial act.  I'm not sure how that could be done when the document did not exist in paper form. 

From my perspective, until there is some clarification of how an electronic document is acknowledged, I'm not sure we will see many of them here at the registry of deeds.

Solar Energy and the Registry of Deeds

Yes, the south-facing Record Hall which is now the recording hall does get pretty warm on sunny days but that's not what I'm talking about.  Last summer, a sales person for a solar energy company was making the rounds of my neighborhood offering no-cost installations of roof top units and cheap electricity for years.  I never seriously considered it but some of my neighbors did.  It never occurred to me - although it should have - that the registry of deeds might be involved.

Last week one of register colleagues sent me a document that had been presented for recording in that register's office.  The caption read "Notice of Solar Energy Producer Contract" and it emphatically stated that it was not a lien or encumbrance.  Except I think it is.

The document states that the company retains ownership of the "solar electric generation system" that is to be placed on the house and that such equipment remains "personal property" and does not become part of the real estate in the real estate law sense of the word.  The contract also states that the homeowner agrees to buy electricity for 20 years.  But how many people live in the same house for that long a period of time?  The agreement permits the current homeowner to transfer the contract to the new owner but only if the new owners meets the company's credit standards.  If the current owner fails to work that out with the solar company, then the current owner is liable for various penalty payments.

None of this should keep people from considering these kind of solar energy contracts, but everyo

Mid-Month Recording Statistics

Big jump in foreclosures

Many of the indicators in real estate are trending positive and so the recovery continues to plod along.  One negative sign, however, is an uptick in the number of new foreclosures.  During the first three weeks of January last year, there were 10 orders of notice recorded (an order of notice signals a new foreclosure); for the same three weeks this year there have been 56.

Here's how the 56 orders of notice recorded since January 1, 2013 breakdown by town:

Billerica - 7
Chelmsford - 2
Dracut - 9
Dunstable - 1
Lowell - 26
Tewksbury - 4
Tyngsborough - 3
Westford - 2
Wilmington - 2

It's been my theory that while these are new foreclosures, they are not of new mortgages.  To test that idea, I at the year of origin of the first thirty mortgages that had corresponding orders of notice recorded this month.  Here's the breakdown of that:

2002 - 2 mortgages
2003 - 3 mortgages
2004 - 1
2005 - 4
2006 - 6
2007 - 7
2008 - 4
2009 - 2
2010 - 0
2011 - 1
2012 - 0

So yes,

Median price increase

The "Bucks" blog on the New York Times website has a post today reporting that housing prices appreciated 6% during 2012 which is a rate of increase more like one that occurs during a robust period of rising prices as opposed to the slow recovery we seem to be experiencing now.  Curious about what was going on in this region, I used a simple software program we have to calculate the median price of deeds recorded during the past several years.  I framed the search to include all deeds with consideration of greater than $75,000 but less than $1.5 million.  Here's what I found:

In 2008, there were 3407 deeds with a median price of $255,000;

In 2009, there were 3418 deeds with a median price of $250,000;

In 2010, there were 3276 deeds with a median price of $256,500;

In 2011, there were 3113 deeds with a median price of $251,500;

In 2012, there were 3722 deeds with a median price of $260,000.

The median price increase from 2011 to 2012 was 3.5%

Holding big banks accountable

There's a lot of outrage these days, real and feigned, about robosigning and missing assignments, but neither of them get me very excited.  Sure they were wrong and helped muddle up our real estate records, but they had very little to do with the outrageous lending and investment practices that caused the collapse of the global economy.  While a few low-level managers who signed the names of others to documents are now being prosecuted, not a single investment banker has met a similar fate despite wrongdoing of a far greater magnitude.  A post today in the Deal Book blog of the New York Times gives some detailed insight into how these big banks operated and how outrageously they behaved.  After reading it, you are left astounded at how invisible have been the efforts of regulators and prosecutors to assess blame. 

$1 deeds

The number of deeds recorded is an important statistic in tracking the local real estate market.  On any given day, however, many of the deeds recorded are not arms-length transactions.  Instead, they recite consideration of $1 and are typically between parties that are related in someway.  Assuming that the percentage of these deeds is a constant, tracking the total number of deeds recorded each day is an accurate indicator of trends in the market.  Still, the percentage and reason for these $1 deeds is also of interest.  Just yesterday there were 32 deeds recorded.  Eighteen of these - 56% - were for $1.  While the circumstances of each of these deeds might not be stated explicitly, they often can be discerned from the context of the document.  Here's what I found from yesterday's group:

5 deeds conveyed property into a family trust
1 conveyed it out of a trust
2 involved divorcing couples transferring the real estate to one of them
2 involved HUD and another lender
1 was used to change a name after a marriage
3 conveyed property to the owner and the new spouse after marriage
4 involved heirs of the same estate transferring the same parcel to a third party

Martin Luther King Day

The registry of deeds will be closed on Monday, January 21, 2013 for the Martin Luther King Day holiday.

Mid-Month Recording Statistics

Here's a comparison of the first two weeks in January in 2012 and 2013:

Deeds: In the first two weeks of January 2012 there were 2162 deeds recorded; for the same period in 2013 there were 2881, an increase of 33%.

 (all of the following refer to the first two weeks of January in 2012 and 2013)

Mortgages: In 2012 there were 451 mortgages; in 2013 there were 638 mortgages, an increase of 41%.

Foreclosure Deeds: In 2012 there were 18 foreclosure deeds; in 2013 there were 8 foreclosure deeds, a decrease of 56%.

Orders of Notice: In 2012 there were 11 orders of notice; in 2013 there were 46, an increase of 318%.

SJC Foreclosure Cases

The following is a brief summary of four cases decided by the SJC since 2011 related to foreclosures:

U.S. Bank National Association v. Ibanez
SJC-10694 – decided January 7, 2011

The foreclosing lender that purchased property at auction brought an action to quiet title due to questions about the timeliness of assignments of the mortgage.  The SJC upheld the trial judge’s decision to invalidate the foreclosure because the foreclosing bank had never been assigned the mortgage that was foreclosed.  The SJC stated that a formal, recorded assignment is not absolutely necessary (although it would be preferred) but that other documentary evidence could be offered to establish the fact of a timely assignment.  The Court also applied this holding retroactively which called into question the title of many previously foreclosed properties since the routine practice in the real estate field was to record necessary assignments after the fact.

Bevilacqua v. Rodriguez
SJC-10880 – decided October 18, 2011

U.S. Bank conducted a foreclosure sale of the home of Pablo Rodriguez without having the mortgage properly assigned to it before the foreclosure.  Before that became an issue, U.S. Bank, the purchaser at the foreclosure auction, sold the property to Francis Bevilacqua.  Because of the now-defective foreclosure in his chain of title, Bevilacqua sued to extinguish any rights Rodriguez may have in the property.  While Bevilacqua acknowledged the defect in the foreclosure, he asserted that his rights as a bona fide purchaser of the property should be superior to any rights of Rodriguez.  The SJC disagreed, holding that the untimely assignment was clear on the record before Bevilacqua purchased the property and since he was deemed to have notice of the title problem, he was unable to assert any rights as a BFP.

Eaton v. Federal National Mortgage Association
SJC-11041 – Decided June 22, 2012

Henrietta Eaton challenged the foreclosure of her property contending that the entity that conducted the foreclosure did not also hold the underlying promissory note.  The SJC held that only the actual note holder or the authorized agent of the note holder may conduct the foreclosure.  The court, however, did not apply this holding retroactively, stating that prior law on this issue was “not unambiguous.”  This was a great relief to the legal community since the practice of doing the foreclosure without holding the note was widespread.

HSBC Bank v. Matt
SJC-11101 – Decided January 14, 2013

The SJC held that a party filing a complaint under the Servicemembers Civil Relief Act must be the holder of the mortgage that is to be foreclosed at the time the Servicemembers complaint is filed.  Because this is an issue of subject matter jurisdiction, the trial judge is obligated to determine this whether or not it is raised by the defendant.  The SJC also held that only a homeowner who is on active military service has standing to file an answer in a Servicemembers case and that such a case cannot be used as a forum for non-military defendants to raise and litigate other issues.

HSBC Bank vs Matt

The SJC issued another mortgage decision yesterday, although the court pretty emphatically declared the case had nothing to do with mortgage law which is technically correct.  Jodi Matt had defaulted on her mortgage so HSBC filed a complaint in the Land Court under the Servicemembers Civil Relief Act seeking permission to foreclose.  Matt, who was not in the military, filed an answer claiming that HSBC did not have an interest in the mortgage and should be denied the right to foreclose.  The Land Court ruled that Matt had no standing and that, despite not yet being the holder of the mortgage in question, that HSBC could proceed with the action because it was a potential holder of the mortgage.

The SCJ agreed with the Land Court regarding the homeowner, holding that in a Servicemembers case, only homeowners who are on active duty in the military have standing to even file an answer.  The SJC disagreed with the Land Court decision regarding the bank, holding that only the mortgage holder (or one acting on behalf of mortgage holder) would have standing to file a Servicemembers claim.  Since this went to subject matter jurisdiction, mortgage ownership by the plaintiff was something that the judge should determine in every case, whether or not it was raised by the defendant.

In this case, HSBC had not yet had the mortgage assigned to it when it filed the Servicemembers complaint, so according to the SJC, HSBC did not standing to file the complaint so that matter should have therefore been dismissed.  Prior SJC decisions on foreclosures have held that the lender must possess the mortgage prior to the first publication of the notice of mortgagee's sale of real estate for the foreclosure to be effective.  This case pushes the date of possession of the mortgage even earlier in the process. 

The SJC did not specify whether this case applied retroactively.  If that's the case, thousands of foreclosures will be effected.  The foreclosure will still be good, but if the Servicemembers case was void, then the homeowners who were defendants in those cases will still have a potential right in the property even though the property had already been foreclosed and resold.  To extinguish that right will require a petition to the Land Court.

Foreclosure settlement deadline Jan 18

Attorney General Martha Coakley has issued a press release reminding the more than 21,000 Massachusetts borrowers who lost their homes to foreclosure that they have until this coming Friday, January 18, 2013, to file a claim for payment under a major settlement that was reached with a number of national lenders last fall by a collection of state attorneys general.  Just last week another settlement was announced, but the Friday deadline applies to an older matter.  Still, if you believe you qualify, please read the info from the Attorney General's office and fill out and submit the necessary forms.  

Middlesex DA Gerry Leone will not seek reelection in 2014

Last night's announcement by Middlesex District Attorney Gerry Leone that he will not appear on the 2014 ballot for re-election to DA or for any other elective office prompts me to write about politics rather than real estate today.  Leone was first elected in 2006, succeeding Martha Coakley who was elected Attorney General that year.  Leone was re-elected without opposition in 2010 to a second four year term.  His announcement has launched much speculation about possible successors. 

I'll refrain from dwelling too much on the future here other than to say that with the governorship, all Constitutional offices, all Congressional seats, and the US Senate seat now held by John Kerry but which will be the subject of a special election this summer all on the ballot and now with the Middlesex DA's office, the 2014 state election will be a historic one. 

Looking to the past, some notable names in Massachusetts politics have held the Middlesex DA's seat including Scott Harshbarger, Tom Reilly and Martha Coakley and two first assistant DA's went on to hold other offices: John Kerry and Marty Meehan.  So while not an automatic launching pad to higher office, the Middlesex District Attorney's position has been that for several of its occupants which will make the coming campaign all the more interesting.  

CFPB Ability-to-Repay Rule

The Consumer Financial Protection Bureau yesterday announced its new "ability-to-repay" rule.  It requires lenders to ensure that prospective borrowers are able to  repay loans they obtain and it prohibits a variety of risky practices such as "no doc" and "interest only" loans that were significant contributors to the nation's foreclosure crisis.  Here's some of what CFPB chief Richard Cordray said about the new rule:

Unaffordable loans helped cause the worst financial crisis since the Great Depression. People across the country were sold unsustainable mortgages. Some may have entered with their eyes open, seeking to ride the wave of rising housing prices, but many were led astray. For many borrowers, it appears that lenders ignored the numbers to get the loan approved. This kind of reckless lending was an endemic problem. To put it simply: lenders should not set up consumers to fail.

Criticism of $8.5 bil mortgage abuse settlement

The lead editorial in today's New York Times criticizes federal regulators for the "flawed" settlement reached with ten major banks for alleged abuses in the mortgage industry.  The settlement, which totals $8.5 billion, will provide $3.3 billion in cash payments to those who have already lost their homes and $5.2 billion for modifications to loans that are currently underwater.  While that seems like an enormous amount of money, it is dwarfed by the number of homeowners who either have or had bad mortgages.  I agree with the sentiment expressed in the editorial that the efforts by the Feds to punish abusive practices and provide real assistance to those with distressed mortgages has not only been ineffective, but consistently ineffective for going on five years now.  There's a certain "going thru the motions" quality to the actions of both regulators and lenders, as if they're waiting for us to all grow tired of waiting and forget what happened.  I do think the window for effective action to remedy and punish past abuses is nearly closed, but that doesn't mean we should forget what happened and implementing effective rules that diminish the chances of it happening again.

City of Lowell draft Master Plan

The city of Lowell is nearing the end of a multi-year process of updating its master plan.  The new version, called Sustainable Lowell 2025 is now available in draft form and public comments and suggestions are being aggressively solicited by city planners.  A public comment event will be held tomorrow evening, January 9 (Wednesday) at the Lowell Senior Center, 276 Broadway, from 6 to 8 pm.  Comments can also be sent by email (awilliams@lowellma.gov) and should be transmitted no later than January 15, 2013.

Even if you're not from Lowell, if you have any interest in urban issues or strategic planning, this document will be of considerable interest to you so please check it out.

Administration of Oath of Office Ceremony

Last evening I attended the Registries of Deeds "Administration of the Oath of Office" ceremony hosted by Secretary of State William Galvin at the State House.  Besides taking the Oath as Register of Deeds (which was administered by Secretary Galvin), the Oath as Assistant Recorder of the Land Court was also administered by Deborah Patterson, the Recorder of the Land Court. 

Here's the lineup of Registers of Deeds for the coming term, listed by district name, location of registry and then name of register with new registers indicated:

• Middle Berkshire - Pittsfield - Patricia Harris (new)
• Northern Berkshire - North Adams - Frances Brooks
• Southern Berkshire - Great Barrington - Wanda Beckwith
• Northern Essex - Lawrence - Paul Iannuccillo (new)
• Southern Essex - Salem - John O'Brien
• Franklin - Greenfield - Scott Cote (new)
• Hampden - Springfield - Donald Ashe
• Hampshire - Northampton - Mary Olberding (new)
• Northern Middlesex - Lowell - Richard Howe
• Southern Middlesex - Cambridge - Maria Curtatone (new)
• Suffolk - Boston - Francis Mickey Roache
• Worcester - Worcester - Anthony Vigliotti
• Northern Worcester - Fitchburg - Kathleen Daigneault
• Barnstable - Barnstable - John Meade
• Northern Bristol - Taunton - Barry Amaral
• Southern Bristol - New Bedford - Mark Treadup
• Bristol Fall River - Fall River - Bernard McDonald
• Norfolk - Dedham - William O'Donnell
• Plymouth - Plymouth - John Buckley
• Dukes - Edgartown - Dianne Powers
• Nantucket - Nantucket - Jennifer Ferreira

Essex North oath of office ceremony

This morning I traveled to Lawrence for the oath of office ceremony for Paul Iannuccillo, the newly elected register of deeds for the Essex North District.  There is a formal oath ceremony this evening for all registers of deeds at the State House, but Paul and the other four newly elected registers were also required to take the oath before their respective registries opened for business today.  Because I am also a Commissioner to Qualify (i.e., someone authorized to administer oaths), I was able to participate directly in this morning's ceremony.  Paul had approximately 50 family members and other guests in attendance including former Essex North Register of Deeds Tom Burke (who retired in 2006).  Today was also my first visit to the Essex North Registry's quarters on the south bank of the Merrimack River in the same complex as Sal's Riverwalk (in fact, Lowell's John MacDonald who works in the same building was also at the ceremony).  Because of the official occasion, I didn't have time for a full tour but I'll return soon to see the entire operation.