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

Electronic Recording stats for July

The Middlesex North Registry of Deeds recorded 5028 documents.  Of them, 2013 (40%) were recorded electronically.  This percentage is on the high side of our monthly averages for this year.  Here are the percentages of documents recorded electronically for each month this year:

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

During July, the day with the highest percentage of electronic recordings was Friday, July 25 with 56%.  The second highest percentage was Thursday, July 31 with 52%.  It's interesting that the two days that are traditionally the busiest for recording - the last day of the month and the last Friday of the month - are the two days with the highest percentages of electronically recorded documents.  

Globe reports Senate Bill 1987 "dead" for now

I've written several posts recently (on July 30 and on August 12) about Senate Bill 1987, "An Act clearing titles to foreclosed properties" including that Governor Patrick had returned the bill to the legislature with a proposed amendment.  The Boston Globe reports today that the governor's action effectively killed the bill since the legislature is now out of session and is unlikely to reconvene to take up the amendment to this bill.  Here's the key line from the Globe story:

Patrick returned the bill to lawmakers with an amendment, asking them to give consumers 10 years to sue over titles instead of three. Patrick’s action effectively kills the legislation since the Legislature, which adjourned for the year at the end of July, is not expected to take up the amended bill. 

Securitizing non-performing loans

The practice of securitizing mortgages was one of the key drivers of the real estate bubble of a decade ago.  By bundling thousands of mortgages together as the principal of a bond fund and then selling shares of that fund to investors, Wall Street revved up an engine that demanded more and more mortgages for fuel.  The securitization process had been around long before 2004 but it seemed to have achieved new levels of intensity and innovation (not necessarily a good thing, as it turned out) in the early years of the 21st century.

One would think that the collapse of that bubble would have caused a reassessment of the securitization process as an investment vehicle.  According to today's entry in the Deal Book blog on the New York Times' website, that's not the case.  We now have a market for securitizing non-performing mortgages that are either in foreclosure or on the verge of foreclosure.  Last year more than $11 billion dollars worth of assets passed through this process.  There is an estimated $660 billion more in value tied up in nonperforming mortgages so this type of investment may become more popular.

It seems irrational to use "nonperforming" loans as in investment.  Where's the cash flow?  Well, there is none that comes in the form of monthly mortgage payments.  Instead, there are the proceeds from the auctions that occur as the mortgages are foreclosed.  Deal Book says these funds have been returning a 4% investment with a payout in 2 years.

Like I said, this all seems strange to me but anything that moves homes from the stagnation of non-perfoming mortgages to the potential of new, solvent owners is generally a good thing.  

Back to the drawing board for An Act Clearing Titles?

As this year's session of the state legislature came to a close at the end of July, it seemed that Senate Bill 1987, An Act clearing titles to foreclosed property, would be enacted.  Back then, I wrote a blog post explaining the details of the bill.

Although the bill passed the House on a unanimous voice vote in the closing hours of the session, it turned out to be a controversial measure.  Advocates for victims of improper foreclosures objected to what was essentially a three year statute of limitations to challenge a foreclosure.  They take the position that the current statute of limitations is 20 years which is the case for an action of ejectment (used most often in adverse possession cases) and offered an amendment making the time limit 10 years.  Proponents of the bill argued that the shorter time period was necessary to make titles that have a foreclosure in their recent past marketable and that on balance, the public interest was best served by assisting innocent third party purchases of these properties with the shorter time limit.

According to Attorney Richard Vetstein on his Massachusetts Real Estate Blog, Governor Patrick did not sign the bill but sent it back to the legislature with a proposed amendment that would make the time limit 10 years.  Attorney Vetstein surmises that this will effectively kill the bill at this time since it's unlikely that its proponents will agree to the longer time limit.  If that occurs, proponents could refile the bill in the next legislative session, hope that it passes in its current form and hope that the new governor will go ahead and sign it.   

Attorney Arthur L. Eno, Jr. 1924 – 2014

One of the leading Massachusetts real estate lawyers of the second half of the twentieth century, Lowell-native Arthur L. Eno, Jr., passed away on August 6, 2014.  While there are no calling hours, relatives and friends are invited to attend his committal service on Tuesday, August 12, 2014 at 1 p.m. in the Chapel at St. Joseph Cemetery, 96 Riverneck Rd., Chelmsford.  The following is the full text of his obituary from the Martin Funeral Home website:

Attorney Arthur L. Eno, Jr. was born in Lowell April 27, 1924 and died August 6, 2014, a stone’s throw from where he grew up—overlooking the Merrimack River in the city he loved.

As the firstborn son of Arthur L. and Claire (Lamoureux) Eno, Sr. his first language was French. He attended St. Joseph Grammar School and Keith Academy in Lowell and his childhood buddy was Jack Kerouac, another of Lowell’s Franco-American sons.

While Jack’s destiny was to leave Lowell, Louis’ destiny was to stay. Except for college and the war, he never lived more than 20 minutes from the city. Gifted with a strong intellect and an indomitable work ethic, he was accepted into Harvard at age 14. At the suggestion he prepare a bit more socially, he took an additional year of studies at Phillips Academy Andover.

Never one for dawdling, he completed his undergraduate Classics degree in three years; served in the Signal Section of the Army in Morocco, Italy, France and Germany for three years (he was in Paris at the end of the war); spent a year studying at the Sorbonne and returned to enter Harvard Law School, which he completed in just over two years.

After admission to the Massachusetts Bar in 1948, he became an Assistant Professor of Law at Northeastern University at age 24, just as he was opening his own private law practice in Lowell. Then, for the next 53 years, he commuted every day to the same neighborhood, many of them in his bright orange VW bug. In 1994, he created a firm, Eno Boulay and Martin (now Eno Martin Donahue) and retired in 2001.

In 1957, friends masterminded a fateful meeting with Ann Fitzpatrick of New Rochelle, New York. He called her at her New York City office to ask if she could arrange theater tickets for his girlfriend and him. This interesting tactic somehow worked and he successfully wooed Ann to Massachusetts. While the couple couldn’t have been more different in temperament or outlook, they were married 56 years and raised three children, John, Madeleine and Will.

One of their proudest achievements was to move a 300-year-old house from Amesbury to Carlisle, Mass. Louis heard that a beautiful old home was up for auction due to the construction of Route 495. He carefully tucked two sealed bids, one low and one high, into his jacket pocket. When it came time to present bids, he forgot which was which, but still managed to win the house. He and Ann dismantled and moved it—board by board, brick by brick—and painstakingly recreated it on acreage in Carlisle.

Civic involvement was important to him, and he served on numerous professional organizations and political groups: the Lowell School Committee (1951-1955), the Lowell Historic Board (1984-1993), and the Middlesex Canal Commission. He was a Trustee of the Central Savings Bank, a Director of the Jeanne d’Arc Credit Union (1972-1992), President of the Lowell Humane Society, President of the Middlesex Canal Association (1962-1972) and President of the Mass. Conveyancers Association (1982-1984).

While law was his vocation, the history of Lowell was his passion. He edited Cotton Was King, a compilation of essays about Industrial Revolution-era Lowell, published in 1976. He translated Immigrant Odyssey from French to English. Antiquarian books, bottles, and artwork all with the common theme of Lowell lined the bookshelves of the living room, and his office was a veritable museum to the city.

His numerous awards include Honorary Oblate of Mary Immaculate (1979), the Richard Johnson Award (Mass. Conveyancers Association), Lawyer of the Year (Greater Lowell Bar Association, 1991) and Franco-American of the Year (2000).

He was also co-author of Massachusetts Real Estate (WestGroup) and editor of annual supplements for the publication for dozens of years. He edited the Massachusetts Real Estate Sourcebook (published by Mass Continuing Legal Education).

Deeply religious, Louis rarely missed attending Mass, even while traveling. In his rare spare time, he took the family in the station wagon to explore the canals and locks of the eastern seaboard.

Until he lost his sight several years ago, reading was his ultimate pleasure. All he needed for a happy vacation at the family cabin in Vermont was his tall glass of ice tea and a tall stack of library books. 

He read quickly and remembered details. His 10-year-old daughter once asked him to read Charlotte’s Web so she could discuss it with him. He sat on the porch and read it in a single sitting while she watched. A lifetime classics student, he gave his young children Peanuts books in Latin for Christmas.

He loved lobster, croissants, Paris, Quebec, speaking French, reading the Greek philosophers, sci-fi movies, Bennie Hill, large dogs and his family. There was very little about the world, history, or politics that he did not know. For the past several decades, he met his friends Lenny and Jay for lunch, jokes and political talk just about every Saturday.

His baby granddaughter was making her entrance into the world at the very moment he departed.

Surviving him in addition to his beloved wife, Ann, are his children John (Jeanne Palanza) of North Andover, Madeleine (John Roper) of Sandy, Oregon, Will (Maria Dizzia) of Brooklyn, NY, and brand-new granddaughter, Albertine Eno. His brother, Paul A. (Janice) Eno of Taunton, MA and dozens of nephews, nieces, and grandnephews and grandnieces, each of whom he adored. He was preceded in death by his beloved sister Jacqueline.

July 2014 recording statistics

Here are the number of various document types recorded in July 2014 compared to the number from July 2013.

For the entire registry district:

There were 650 deeds recorded in July 2014, a 6% decline from 688 in July 2013
There were 915 mortgages in July 2014, a 28% decline from 1279 in July 2013
There were 10 foreclosure deeds in July 2014, a 29% decline from 14 in July 2013
There were 36 orders of notice in July 2014, a 71% increase from 21 in July 2013

For Lowell only:

There were 157 deeds recorded in July 2014, a 10% decline from 175 in July 2013
There were 179 mortgages in July 2014, a 33% decline from 269 in July 2013
There were 4 foreclosure deeds in July 2014, a 56% decline from 9 in July 2013
There were 10 orders of notice in July 2014, a 100% increase from 5 in July 2013