Top Ten Registry Events of 2014

Here are ten items of significance to the registry of deeds that occurred in 2014:

The total number of documents recorded in 2014 dropped 20% compared to the number recorded in 2013.  The main cause was the virtual disappearance of the mortgage refinancing market; 13,272 mortgages were recorded in 2013 but only 9,161 were recorded in 2014.

The number of foreclosures remained stable with 155 foreclosure deeds recorded in 2014 compared to 150 recorded in 2013.  The same was true for orders of notice with 346 recorded in 2014 versus 333 in 2013.  Unfortunately, the volume in both years is still high relative to a stable or improving real estate market.  Contributing factors include a large number of homeowners who are still underwater on their existing mortgages and consistently low interest rates which led anyone who would benefit from refinancing to have already done so in a prior year.

This year we received official word that the Middlesex North Registry of Deeds will be a tenant in the new Lowell Judicial Center which is scheduled to open in 2018.  The prior plan was to exclude the registry from the new facility and have it remain in the current location or to occupy leased space elsewhere.

As of the end of 2014, twenty of the twenty-one registries of deeds in Massachusetts offer electronic recording.  Having near universal acceptance of this technology by registries should lead to a greater volume of recordings to be done using this technology.

Senate bill 1987, “An Act Clearing Titles to Foreclosed Properties,” a measure that would set time limits on asserting Ibanez-type title defects in foreclosed properties, nearly made it into law.  It did pass both houses of the legislature in the closing days of the session, however, Governor Patrick did not sign the bill but sent it back with suggested amendments.  Because the formal legislative session had ended by then, no further action was taken and it is unclear whether this or a similar bill will be addressed in 2015.

In Haskins v Deutsche Bank, the Appeals Court held that the notice of the right to cure a default that MGL c.244, s35A requires to be sent by the mortgagee to the mortgagor prior to foreclosing, met the requirements of the statute when it was sent by the servicer of the loan rather than the record title holder of the mortgage.

In April, Middlesex North began a pilot program with the town of Wilmington by sending deeds recorded for the month for the town to the assessor in PDF rather than TIFF form.  We expect to expand this change to other towns in the district during 2015.

The early months of 2014 were plagued by frequent snowstorms that caused the courthouse and the registry to be closed early or for the entire day several times in January and February.

During 2014 we had several encounters with customers seeking to record questionable documents that appeared to be associated with the “redemption” or “sovereign citizens” movements.

At the Massachusetts Digital Government Summit held in early December, top technology officials for the Commonwealth and the city of Boston made predictions of the direction that government technology should and will take during the coming years.  Generally speaking, this and other registries of deeds are on the right track.

2014 Holiday Schedule

The Middlesex North Registry of Deeds will be closed on Christmas Day (December 25) and New Years Day (January 1, 2015).  The registry will be open regular hours (830am to 4:15pm) on Friday, December 26, Wednesday, December 31, and Friday, January 2, 2015.

Technology and Legal Liability

Last week at the Massachusetts Digital Government Summit spoke about how much technology will transform the way cities operate.  Perhaps to most exotic prediction to me was the speaker's assertion that self-drive automobiles are already feasible and nearly available.  These cars use radar, cameras, other sensors and lots of computing power to navigate and "drive" a car safely and smoothly whatever the destination.  The scenario in which this technology might first come available could be driving in traffic.  Imagine being stuck in the bumper to bumper morning commute on Rte 93 and being able to engage your "self-drive" feature and then break open whatever novel you were reading that week as the car nudged its way forward in the midst of all that traffic.

While the technology currently exists to make this scenario feasible and even affordable, the biggest obstacle is a legal one: existing laws don't permit computer driven cars and, perhaps more importantly, the law of liability has not developed sufficiently to encompass this type of usage.

Liability and insurance coverage are also big issues in another area in which technology has already disrupted establish ways of doing business.  Companies like Uber and Airbnb use technology to allow private individuals to use their own cars and their own houses to provide transportation and lodging for a fee.  This is called "the sharing economy" and it's revolutionizing the way some people live and earn livings.  But as this short article on the Esurance website makes clear, if you're regularly getting paid to drive people around in your car, you are operating a livery service and your auto insurance policy specifically excludes that from coverage.  Get in an accident and your auto insurer will decline coverage.  Recognizing this gap, companies like Uber are now providing some insurance but it's an unsettled area and might not cover the driver or vehicle (just passengers and others outside the vehicle).

These are a couple of examples of how society, aided by technology, often outpaces the legal system.  The law catches up eventually, but not before some people get hurt by rapid changes in society and business.  That's not a reason to stifle progress but it is a reminder that the world is a complicated place.

Foreclosures in 2014

One of the bright spots in real estate this year is the consistently low numbers of foreclosure documents being recorded.  We're on a pace in 2014 to record 156 for the year.  In 2013 we recorded 150.  Compared to the 602 foreclosure deeds recorded in 2008, those figures look pretty good.  But if we look back to the time before the housing bubble inflated and then burst, we can see that today's foreclosure rates remain inflated.  For instance, in 2001 there were 44 foreclosures, in 2002 there were 45; and in 2003 there were 42.

Of the foreclosures already recorded this year, 72 were for property in Lowell.  The majority of them - 83% - were of mortgages that were originated in 2007 or earlier which is when housing values were at their inflated peaks.  A little fewer than half of these mortgages were used to purchase the property while 54% were refinancings, mortgages obtained after the property was obtained by the owner.  Sadly, in eight of these cases the homeowner had obtained title through gift or inheritance meaning that he or she did not have to pay anything to acquire the property.  These mortgages were all used to extract equity from the properties.

Thus far in 2014 there have already been 326 orders of notice recording which suggests that foreclosures will continue to be with us into 2015.

On Monday and Tuesday of this week I attended the Massachusetts Digital Government Summit.  It was a very interesting discussion in the latest trends in government technology.  Here are my notes from the conference:

Opening Remarks by Glen Shor (Secretary of Administration and Finance)

Our goal is to use technology to make it easier for citizens to interact with government.  Also, to make more data-driven decisions.  Deval Patrick has committed to technology even in bad financial times.  We’ve been more inclined to use off the shelf software rather than building applications in-house.  Developing it in-house, you have a 100% chance of getting what you want but only a 50% chance of success.  With off-the-shelf, you get 85% of what you want with a 90% chance of success.

Trends in Mass IT by Bill Oates, Massachusetts CIO

Three areas of emphasis have been data management, expanding broadband, and collaboration with cities and the educational system.  He showed a video about the Massachusetts Innovation Challenge in which $50,000 in prizes were awarded in a competition among 25 startup companies.  The goal was to take the creativity inherent in the IT business and apply it to state government. 

CIO Panel Discussion

Moderators:

Bill Oates, Chief Information Officer, Commonwealth of Massachusetts
Jascha Franklin-Hodge, Chief Information Officer, City of Boston

Panelists:

Craig Burlingame, CIO City of Boston, 2000-2004
Louis Gutierrez, CIO Commonwealth, 1996-1998 and 2003-2005
John Letchford, CIO Commonwealth, 2010-2013
David Lewis, CIO Commonwealth, 1998-2002
Anne Margulies, CIO Commonwealth, 2007-2010

This was a loosely structured question and answer session in which the panelists gave wide-ranging answers to issues raised.  Below are some of the more memorable points that were made:

Y2K gave state government something that had to be done on time; the deadline couldn’t slip.  This was a very different dynamic.  The procurement process is difficult but if all of these procedures were not in place, the system could very easily be corrupted.  Be careful about relying too heavily on consultants.  Remember the essence of consulting: if you can’t solve a problem, there’s good money in prolonging it. 

In cities, especially, there’s often a losing struggle between funding things that are visible like parks and paying for back-end things like computers that are largely invisible.

The future? Because IT is the backbone rather than the backroom, CIOs will become more like COOs.  IT is part of everything an organization does.  One of the tasks of a CIO is to make very compartmented offices work together to improve the customer experience.

At Harvard, they refer to the future as SMAC: social, mobile, analytics and cloud.

“Culture eats strategy for breakfast” because the pace of change in technology is unbelievable and the future is very nebulous.

You have to spend half your time dabbling in stuff.

Fail early and fail often.

CIOs have to lead major change in organizations because technology is disrupting the current way of doing things.  You have to be good at explaining how new things work otherwise the new things will never succeed.

Patience and persistence are key traits.  Obstacles are inevitable.  Don’t be distracted by minutia. 

IT and Operations are morphing together into the same thing.   END

Day Two Opening Remarks

Jascha Franklin-Hodge, CIO, City of Boston

The role of the CIO is changing greatly.  It’s not just technology anymore but also includes operations.  Technology doesn’t solve anything by itself but nothing in government gets done without technology.  However, government isn’t meeting customer expectations.  They want government service to be as fast and efficient as buying something from Amazon.  Government doesn’t have the resources to compete with business so we have to be more agile and innovative to succeed in the world of limited budgets.

The best way to avoid a big failure is to have a lot of little failures early in the process.  A good way to do this is to develop in-house expertise on today’s technologies. 

Relentlessly focus on end-users.  Design systems for them, not for the employees who will be using the systems.

We have the power to change the perception that government is inherently wasteful and inefficient.  We can show our constituents that government can work well.  Great customer service sends the message that government cares.  END

Specific Topics

Mobile/Government – Jim Upton of AT&T Mobility and Agnieszka Ilnicka of City of Boston IT

(Upton) Citizens are going more mobile but government is not.  Government is losing touch with its constituents.  Government needs to catch up.

Successful mobile apps are fast and “on point” meaning that they do a specific task very well and don’t try to do too much.  It’s better to deliver apps in pieces than it is to try to create a single one-size-fits-all product.  Creating apps for the government has extra challenges such as making them multilingual or protecting privacy.  The apps that get most widely adopted are those available in an app store which should be a consideration in your design decisions.    

Apps take a variety of forms from a programing perspective.  Native apps are those written in the mobile operating system’s code (iOS or Android).  Other apps are written in HTML5.  These are probably easiest to write but they can’t be put in the app store.  The most common type of app today is called a hybrid which is written in HTML5 and then “wrapped” in iOS or Android. 

What does the future hold?  Hyperlocal will be big.  He anticipates the widespread use of iBeacons which emit signals that communicate with your telephone and tell you where and how far the beacon (destination) is from you.  The other big thing he expects is “augmented reality” in which you would point your phone’s camera at something (a particular building, for example) and have information about that building automatically appear on your phone’s screen, overlaying the image produced by your camera.

(Agnieszka): Is the manager of “constituent engagement tools” for the city of Boston.  She described the methods citizens of Boston have to interact with their government.  In 2008, there was the mayor’s 24 hour hotline which is staffed by humans around the clock.  Also, there was email, US mail and contact through the city website.  We knew mobile was the next step. 

The mayor’s office of New Urban Mechanics worked with a company called Connected Bits to give us Citizens Connect, a mobile app that allows people to report infrastructure and service problems.  Simplicity was the key to this app and it was very successful.  We soon discovered that the most frequent users of this app were city workers.  This led them to develop a City Worker app which was a beefed up version of the citizen app.  This has been very successful too.  A new app they’re testing is called “Street Bump” which uses your phone’s GPS and accelerometer to make note of when you drive over a bump like a pot hole.  The citizen doesn’t have to do anything other than turn the thing on at the start of a trip.  They continue to fine tune this app.  Her advice was to keep development costs low by partnering with universities, non-profits and businesses.  END

Analytics in the Age of Big Data

Four major trends in IT today: (1) cloud; (2) mobile [we’re always connected]; (3) Internet of Things [gadgets that generate data; and [4] Big Data.  “Big Data” is a very ambiguous term.  It means data of all types and formats.  It can be text files, spreadsheets, databases, video, audio, images, and machine created data such as that emitted from things like cars, thermostats and sensors.  The challenge is to find a way to store and query all of this stuff even though it remains in its native format.  (there’s no clear answer).  The big payoff will come when mashing up all of this data.

Keynote Speaker (Day Two) Chad Vander Veen, editor of a new “media platform” called Future Structure which is described as “the intersection of ideas, infrastructure and technology.”

Because everything is connected today, we have to fundamentally change the way we look at how government operates.  He compares it to how fantasy football has transformed how (some) people look at the game of football.  It’s still the same game but it’s viewed in a way that breaks down all the old boundaries and practices.      

By 2050, 70% of the world’s population will live in cities.  This is a fundamental shift in the history of human civilization.  We have to look at a city as a deeply connected system (or system of systems).  Infrastructure and public health are deeply connected (clean water, working sewers).  Don’t think of roads as being only for cars.  Consider subways, trolleys, bicycles and pedestrians.  A big challenge is how do we move people around our cities more efficiently.

The five pillars of the city are (1) water; (2) waste; (3) energy; (4) transportation; and (5) built environment.  There also a lot of bad ideas out there. 

How will technology influence cities of the future?  With the Internet of Things, everything is connected.  By connecting all of our infrastructure, we generate better data which lets us make smarter decisions.  Value pricing for parking.   

He then talked a lot about “connected autonomous vehicles” which are cars that drive themselves.  By the end of this decade, auto makers will be offering “semi-autonomous vehicles”.  The technology exists today to make this happen but our “soft infrastructure” like law and liability have to catch up.  END

Digital Engagement by Nigel Jacob of the Mayor’s Office of New Urban Mechanics

Boston is using technology to better engage its residents.  We want to make citizens more central to how we govern.  A big issue is trust of government. 

The way we operate is to try a lot of smaller projects, see if they work, and if they do, we scale them up.  If they don’t work, we shut them down quickly.  It’s important to fail fast.  Two examples of this are related to the Boston Public Schools.  One app is called “Discover” which took the existing school department website that shows each of the 100+ schools in the city and redid it to closely resemble a “hotels.com” type of site.  The other app is “where is my school bus” which tells a parent where the bus is in real time. 

The other thing we do is blend online with offline.  You can’t separate online from in person engagement.  They created a “City Hall To Go” which is like a food truck for government services.  It drives to where the people are and offers a variety of services rather than forcing them to come to City Hall.  The other app is called “Community Planit” which is a planning app designed like a game.  Information about real projects and problems are made available online.  Before attending an in-person meeting, people can educate themselves on the facts and the issues so when they do finally come together they are much more productive because a lot of the preliminaries are already done.   

This promotes more civic involvement.

The third thing to remember is that real engagement is hard.  Experiment to find what works.  Experimentation is the key to civic engagement.  END

Education Technologies Today and Tomorrow

By Mark Racine, Chief Information Officer of Boston Public Schools (and a former 5^th grade teacher)

Started by saying that classrooms haven’t changed much in 100 years.  Goes through classroom technology timeline:

·    

• 1890s – handheld slate tablets
• ·        1900s – pencils (affordable but paper isn’t yet so slate tablets continue in use)
• ·        1920s – radio comes to classroom.  Education programs widely broadcast
• ·        1930s – reel-to-reel projectors
• ·        1940s – slide projector (permits efficient distribution of non-book materials by publishers)
• ·        1950s – overhead projector
• ·        1960s – calculators and photocopiers
• ·        1970s – computers in classrooms (but almost exclusively for admin purposes)
• ·        1980s – educational software – students begin learning from computers
• ·        1990s – wired to the Internet – slow but at least they’re connected
• ·        2000s – WIFI

Every one of these technologies is still in use in our schools today.  None have left.  Why are we doing things the same way we always have done?  Why haven’t we evolved?

To change the way we teach we first have to change the way we think about learning.  The old model of learning was linear.  The teacher stood at the front of the room, delivered a standard lesson on a tight schedule whether the students got it or not.  It was like requiring the students to drink 8 glasses of water each day.

Instead, think of learning as a swimming pool in which the student immerses him or herself.  How do you do this?  Technology can surround the student with learning opportunities.  Technology permits this kind of immersion.  But immerse the child in technology, not the teacher. 

Another point: school districts strive to standardize technology which from an Information Technology perspective, is the proper course since it provides economy of scale.  But this type of exclusivity is completely wrong from an education perspective.  Students should be exposed to all types of technology because when they are looking for jobs they will need to know all of these technologies.  If they’ve only been exposed to one in school, the school has missed an opportunity.  Schools should also teach students how this stuff works so that when it doesn’t work they know how to fix it.  This allows students to discover stuff on their own.

The motto should be “failure is not an option, it’s a requirement.”  Failure (of technology) is a learning opportunity.  Teachers and students should prepare for it, deal with it, and learn from it.  One reason teachers rely so much on paper handouts is that it’s a reliable technology that they know is going to work.  That’s not necessarily the case with computers.  But when a computer doesn’t work as planned, it presents a learning opportunity that should be embraced.

Empower the students.  Learning should be personalized even if the technology is not.  And always remember, learning happens everywhere. END

November recording statistics

Here are the recording statistics for the month of Northern Middlesex Registry of Deeds:

481 deeds were recorded this November, a decline of 2% from last year (489)
760 mortgages were recorded this November, an increase of 5% (725)
12 foreclosure deeds were recorded this November, an increase of 50% (8)
33 orders of notice were recorded this November, an increase of 83% (18)
4055 total documents were recorded, a decrease of 6% (4314)

For the year to date:

5965 deeds have been recorded; a decrease of 4% (6207)
8216 mortgages have been recorded; a decrease of 34% (12485)
143 foreclosure deeds have been recorded: 142 were recorded last year
326 orders of notice have been recorded; an increase of 3% (317)
48468 documents have been recorded; a decrease of 22% (62521)

Electronic Recording Update

Yesterday I attended a meeting of the Massachusetts Registers of Deeds Association in Worcester.  Since almost every registry in the Commonwealth now has an active electronic recording system, a representative of each registry that was present at the meeting spoke about the experience of implementing and operating e-recording, customer feedback, and some basic statistics.  The percentage of documents received via electronic recording varied from single digits in the Berkshires to nearly 40% in Middlesex County. 

Here are some detailed electronic recording statistics for this office:

In September, 1925 or 4768 documents were recorded electronically (40%).

Year to date, 14623 of 39511 documents were recorded electronically (37%).

Month by month percentages are as follows:

January - 35%
February - 33%
March - 34%
April 40%
May - 34%
June - 35%
July - 40%
August - 40%
September - 40%

Tax Stamp procedures

Massachusetts law imposes an excise tax on the sale of real estate.  The tax is based on the sales price of the property and is assessed at the rate of $2.58 per $500 of consideration.  The seller is liable for the tax which is collected by the registry of deeds upon the recording of the new deed.  Recently someone from a registry that uses a computer system different than ours (which is the ACS system), me to describe the tax stamp mechanics of our system.  Here's how I responded:

We use the ACS system for recorded land, registered land, and as our electronic recording interface with the rest of the world (although me receive efiles from multiple vendors).  All phases of the ACS system require the person inputting the data (registry clerks or customers efiling) to enter the amount of consideration any time DEED is selected as a document type.  Based on the amount of consideration entered, the system automatically calculates the tax due.  From this point on, recorded land and registered land work one way and efiling works another.

First, recorded & registered land.  When we have completed data entry at the recording counter and have collected the fees and taxes due from the customer, we "save" the transaction which prompts the ACS system to print a 1" x 3" label that contains (for recorded land) the document number, the book and page, the number of pages in the document and the date/time of recording. For registered land documents, that label contains the document number, the certificate number with which the document is affiliated, the book and page of that certificate and the date/time of recording.

Whenever a tax stamp is required, the ACS system automatically prints a second label for the transaction.  This label contains the name and DOR code for this registry (Middlesex North #14001), the date time of issuance, a DOR control number that's automatically assigned by the ACS system, the document number of the document with which the tax stamp is affiliated, the amount of the tax stamp ("Fee") and the consideration stated on the deed ("Cons").

Electronic recording uses a slightly different system, mostly because with electronic recording, we have no tangible document to which we can affix one of our labels.  Instead, we had the ACS technicians alter the system to print the recording information and tax stamp (where applicable) directly on the document.  When we began electronic recording way back in 2005, there was less flexibility as to where that information could be printed.  Because we do not have strict document formatting standards which results in unpredictable margins, I chose to use a cover sheet with electronic recording.  The ACS system automatically inserts this cover sheet at the start of an electronically filed document.  The ACS system prints on this cover sheet all recording information and all tax stamp information (when applicable). 

Regarding the electronic recording cover sheet, I'm not sure that any other registry uses it with their electronic recordings.  I like it because it clearly distinguishes an electronically recorded document from all the others. 

A few final notes.  There is no electronic recording with registered land documents.  We do not number the individual pages of a document; we just state at the beginning how many pages the document has and put that on the first page.  We do not have any type of "end of document" imprint or insert my signature onto every document.

Registry Revenue

The Registry of Deeds collects revenue for the Commonwealth through recording fees, excise tax stamps and surcharges for the Community Preservation Act and the Technology Fund.  The amounts of money collected in these various categories can be used as indicators of trends in real estate.

Thus far in 2014 the registry has collected $9,026,581 in total revenue which averages $1,128,323 per month.  If the eight month total was projected out over the full year, a total of $13,539,871 should be collected.  This would be a 6% decline from last year when we collected a total of $14,367,410.  The decline is mostly in recording fees.  In 2013, the monthly average of recording fees received was $463,542; over the first eight months of 2014, the monthly recording fee average is just $304,859.  This decline is consistent with the overall decline in documents being recorded.  On a more positive note, the amount collected for excise tax stamps is trending upward.  The monthly average of tax stamps in 2013 was $558,363 while the monthly average through August 2014 is $694,434.  Since the tax stamp liability is based on the sales price of the property, this increase suggests that prices are rising.  The higher the price, the higher the tax paid. 

Electronic recording in August

Again in August 40% of the documents recorded at the Middlesex North Registry of Deeds came to us electronically.  That's the third month in 2014 that we've hit that number.  Here are the monthly percentages for this year:

January - 35%
February - 33%
March - 34%
April - 40%
May - 34%
June - 35%
July - 40%
August - 40%

Of the 4730 documents recorded in August, 1914 came in electronically.  That averages out to 91 electronic documents of a daily average total of 225.  The highest percentage of electronic recordings - 52% - came on Wednesday, August 27.  The most documents received electronically in a single day came on Friday, August 29 with 152.  The highest daily document total came on Friday, August 15 with 369 documents.

August recording statistics

Here's a look at the total number of various types of documents that were recorded in August compared to the same month in 2013:

DEEDS - In August 2014 there were 635 deeds recorded; in August 2013 there were 637.  Statistically there was no change.

MORTGAGES - In August 2014 there were 865 mortgages recorded; in August 2013 there were 1085.  That's a decline of 20%.

FORECLOSURE DEEDS - In August 2014 there were 15 foreclosure deeds recorded; in August 2013 there were 11.  That's an increase of 36% (but given the small number overall, it would be best not to make any conclusions of trends based on these numbers).

ORDERS OF NOTICE - In August 2014 there were 31 orders of notice recorded; in August 2013 there were 39. That's a decrease of 21% (but see comment to Foreclosure Deeds above).

TOTAL DOCUMENTS - In August 2014 there were 4730 documents recorded; in August 2013 there were 5917.  That's a decrease of 21%. 

If you project the eight months of recordings to date (34,731) out over this entire year, it would give us 52,096 for the year.  In 2013 we recorded 67001 for the year.  That would be a decline of 22%.  It would also be the fewest documents recorded in a single year since 1991 when we recorded 52019.

Foreclosure trends in 2014

We haven't heard much about foreclosures recently.  Most likely that's because the volume of foreclosure activity is down.  By foreclosure activity I mean the numbers of orders of notice and foreclosure deeds that are recorded month by month.  Below are the numbers for both - orders of notice are listed first and foreclosure deeds second. 

For the entire district:

January 2014 - 14 orders of notice - 10 foreclosure deeds
February 2014 - 25 orders of notice - 17 foreclosure deeds
March 2014 - 19 orders of notice - 10 foreclosure deeds
April 2014 - 38 orders of notice - 14 foreclosure deeds

May 2014 - 29 orders of notice - 12 foreclosure deeds
June 2014 - 28 orders of notice - 5 foreclosure deeds
July 2014 - 36 orders of notice - 10 foreclosure deeds
August (to 8/25) - 22 orders of notice - 10 foreclosure deeds

For Lowell only:

January 2014 - 4 orders of notice - 3 foreclosure deeds
February 2014 - 8 orders of notice - 9 foreclosure deeds
March 2014 - 5 orders of notice - 6 foreclosure deeds
April 2014 - 15 orders of notice - 5 foreclosure deeds
May 2014 - 9 orders of notice - 6 foreclosure deeds
June 2014 - 10 orders of notice - 4 foreclosure deeds
July 2014 - 10 orders of notice - 4 foreclosure deeds
August (to 8/25) - 9 orders of notice - 9 foreclosure deeds