Mortgages and assignments

Recently I received an email from a homeowner asking if Massachusetts law requires that a mortgage that “is transferred from one company to another” be recorded in the registry of deeds. After explaining that the registry of deeds is the custodian of the records and cannot provide legal advice to individuals, I tried to provide some general information that might also answer the customer’s question. Assuming he was referring to an assignment of a mortgage, this is what I wrote:

What most people call a mortgage in Massachusetts is really two different documents. First is the promissory note. That's a contract between the borrower and the lender that establishes the debt and sets out the terms of repayment. The promissory note does not get recorded at the registry of deeds. Promissory notes are often "sold" or transferred from lenders to investors (often other banks). When the note is paid off, the holder of the note (the lender or someone who it has been transferred to) stamps it "paid" and returns it to the borrower.

The second document is the mortgage. In Massachusetts, a mortgage is a type of deed. When you sign a document called a mortgage, you convey to the lender an interest in the property. That interest is the right to foreclose on the mortgage if the borrower defaults in the payment of the note. That means the lender can auction off the property and use the proceeds from the auction sale to pay off or pay down the debt owed on the promissory note. (The lender can then sue the borrower for any deficiency that remains, but that’s a story for another day).

When a lender sells or transfers a note to an investor, the lender normally records at the registry of deeds a document called an assignment of mortgage to show everyone who is the current holder of the mortgage. I don't believe there is a law that requires a lender to record an assignment of mortgage, or to record it within a set amount of time. However, in order to foreclose a mortgage, a lender must record an assignment of mortgage prior to the start of the foreclosure, otherwise the foreclosure would be invalid.

There is an exception to this. Many mortgages are held by a company called MERS (for Mortgage Electronic Registration System). MERS holds the mortgage in trust for whoever holds the note. So in Massachusetts, when MERS holds the mortgage, there is no need to record an assignment of mortgage when the note is transferred from the lender to the investor. That's because MERS holds the mortgage for whoever holds the note.

Finally, it is important to remember that real estate law varies considerably from state to state. Court decisions, statutes or articles interpreting real estate law of other states have little applicability to the law in Massachusetts.

Joint Ownership of Real Estate in Massachusetts

There are three types of joint ownership of real estate in Massachusetts: tenants in common, joint tenants and tenants by the entirety.

Tenants in common is undivided ownership in real property by two or more persons with no right of survivorship between the co-owners.  Thus, when one tenant in common dies, his interest in the property becomes part of his probate estate.  Tenants in common are said to have an “undivided” interest in property since each can possess the whole subject to the co-tenant’s right to possess the same property. A conveyance to two or more persons “as tenants in common” creates tenants in common. Also, a conveyance to two or more persons that does not specify the type of tenancy creates tenants in common.

Joint tenants is undivided ownership in real property by two or more persons with a right of survivorship between the co-owners. When one joint tenant dies, the surviving joint tenants automatically becomes the sole owner of the property. The survivor does not inherit the portion owned by the decedent, rather the decedent’s passing terminates his interest in the property, leaving the survivor as the sole owner. Joint tenants are said to have an “undivided” interest in property since each can possess the whole subject to the co-tenant’s right to possess the same property. A conveyance to two or more persons “as joint tenants” creates a joint tenancy.

Tenants by the entirety is a type of joint ownership limited to married couples whereby each owns the entire property.  Upon the death of one, the decedent’s interest in the property is removed and the survivor automatically owns the entire estate.  Upon a divorce or annulment, the property is held by the former spouses as tenants in common.  This type of ownership also provides protection from creditors: “The interest of a debtor spouse in property held as tenants by the entirety shall not be subject to seizure or execution by a creditor of such debtor spouse so long as such property is the principal residence of the nondebtor spouse.” M.G.L. c.209, s.1.  A conveyance to two or more persons “as tenants by the entirety” creates a tenancy by the entirety. However, if the two people are not married at the time of the conveyance, a tenancy in common is created despite the “tenants by the entirety” language.

“I need a copy of my deed”

One of the most frequent requests received at the registry of deeds is from homeowners seeking a copy of the deed for their house. Depending on how the request is made, we have several ways to fulfill it.

If the customer has come to the registry in person, we simply print the deed from our computer system and give it to him at no charge. (That only applies to deeds given to homeowners; all other prints come with a statutory fee of $1 per page).

If the customer calls us (our number is 978/322-9000), we explain that the deed can be printed from our website (http://www.masslandrecords.com/MiddlesexNorth/) but also offer to send a copy by email or by US Mail (again, at no charge). 

If the customer emails, we just attach a copy of the deed to a reply email. 

If the customer sends a written request by US Mail, we just print the deed and send it out in that day's return US Mail.

Since all recorded documents are freely available on our website, many individuals are able to find, view and print their deeds from there without any assistance from the registry. But we are always happy to help anyone who can’t find their deed or online or who would prefer dealing with a human being rather than a computer.

So if you live in Billerica, Carlisle, Chelmsford, Dracut, Dunstable, Lowell, Tewksbury, Tyngsborough, Westford or Wilmington and you need a copy of your deed, just give us a call at the Middlesex North Registry of Deeds, 978/322-9000.

"The law of defects"

Time to share another email from a registry customer:

Questions 1: What do you consider a "defect" in a deed?

Answer 1: > It's tough to answer that question without you putting it into some context. If the person selling the property fails to sign it, that would be a defect. Same thing if the document was signed but not notarized. There might also be language omitted that could cause a problem but again, that all depends on the context. If you have a specific question, feel free to ask about it.

Question 2: Can a notary sign their own documents? Seems strange when you would want an independent third party (which would be the purpose of a notary). What if the name is different on previous deeds? What if they don't own the property they are selling (or some portion of it)? How is the law of defects applied? I am asking a specific question. What is a defect?

Answer 2: You may be asking a specific question but it's not one I can answer. The law is rarely black and white; usually there's a lot of gray areas so each case is different. That's why I asked you to give me some context for your questions.

As for the follow-ups you do ask, I believe a notary acknowledging his own signature would be a defective acknowledgement for the obvious reason you cite. As for a different name on a previous deed, it depends. Let's say a woman owns a property as Mary Smith but then gets married and takes the name Mary Jones. When she wants to sell the property, Mary Jones may sign the deed. The name is different but it's the same person so there's nothing wrong with that. If Mary Smith and Mary Jones are two different people, then obviously one can't convey the other's property. Finally, there is no "law of defects" that I've ever heard of.

I wish I could have done a better job of responding. Anyone else want to try?

Address Confidentiality

A soon-to-be-homeowner called this week and asked that once she purchased her new home that her name be excluded from our website for confidentiality purposes. She had no problem with her information being in our records; she just didn’t want it on the internet. I explained that what appeared on our website was just a projection of our official database and that the two were essentially one and the same. As tactfully as possible I inquired as to the motives for her request. Someone who is the victim of a stalker, for instance, is in a much different position than someone who is just trying to be extremely cautious with sharing information about themselves.

Back in 2001, the state legislature established the Address Confidentiality Program and placed it under the supervision of the Secretary of State’s office. A document from that time states “The goal of the Address Confidentiality Program (ACP) is to help victims of domestic violence, sexual assault, and stalking stay safe after they have relocated from an address known to their perpetrator.” In practice, someone participating in the program would be assigned a generic mailbox address in a government operated location. That address could be shared with the world and then any mail delivered to it would be confidentially delivered to the participants actual address. As for real estate ownership records, the committee agreed that it would be unrealistic and unworkable to try to exclude them from public view. The consensus was that anyone concerned about keeping their ownership of real estate out of the public eye should instead use a trust arrangement whereby someone else – an attorney, for example – would serve as trustee of a trust that owned the real estate. By proceeding this way, the participant in the confidentiality program would never have her name associated with the property.

As for my caller, I explained the trust option to her and urged her to consult with an attorney if she wished to pursue that further, although I cautioned her that the cost of such an ownership arrangement in both money and convenience, might not be worth the general goal she sought to achieve.

House Histories

Homeowners often contact us asking us how they might determine the year in which their homes were constructed. Here’s an inquiry I received yesterday by email:

Hi. A fellow old-home owner in Lowell referred me to your website as a good source of historical info about our house. When I do a search on the address, I only see info going back to 1990. I'm looking for info back to 1890! Does the system contain old info? I'm trying to determine the actual year the house was built. I've seen conflicting dates on various documents, from 1860, to 1880, to 1905, to even 1917!
Here’s my reply:

All of the land ownership documents (deeds, mortgages, etc) going back to 1629 are available on our website (www.lowelldeeds.com) although they are in several places, depending on their age. The more recent ones are on masslandrecords.com while the older ones - before 1950 - are on www.lowelldeeds.com. Unfortunately, the name index used to find these documents only goes back to 1976 online. We have it all the way back to 1629 but that's only available here at the registry. It is in electronic form, however, and if you bring in a 16 gigabyte flash drive (also known as a "thumb drive") we will give you a copy at no charge. The files for the index are so large that we have not yet been able to get them on the internet.

More to your inquiry, records here at the registry of deeds are primarily concerned with who owns the land and not what is built upon the land, so nothing we have would tell you precisely when your home was built. The best you can do with our records is draw inferences from the various deeds and other documents. For instance, if someone bought the property for $1000 and a year later sold it for $5000, you could infer that something had been built upon it in the interim.

If you decide to come to the registry to conduct your research, we're open from 8:30 am to 4:15 pm Monday thru Friday. On whatever day you do make it to the registry, please stop by our Customer Service desk and ask for me. If I'm available, I'll show you how to use the computers; if I'm not, just ask anyone at the Customer Service desk to help you.

Sorry I can't be more helpful than that, but if you have any more questions, please let me know.

Do-it-yourself deeds

August is a popular month for vacations here at the registry, so I usually spend more time than usual working at our Customer Service Counter which gives me a valuable opportunity to assist customers who call or visit the registry of deeds. Those in the real estate related professions typically have straight forward questions, but members of the public often have more complex inquiries.

This summer, many of these calls are requests to “take a name off of a deed” or make some other change to the ownership of property. These calls make it clear that much of the public is under the impression that we here at the registry maintain some kind of master list of who owns what property and that we either cross out or write in names as ownership circumstances change. In response to these questions, we try to provide a simple explanation of the role played by deeds in land ownership. We then explain that to change ownership, a new deed must be created. That leads to the inevitable question, “can I do that myself?” That’s a tough question to answer. Technically, the answer is yes, but we emphasize that real estate law is complex and that one or two words in a deed could completely change the meaning of the document. Because the asset involved - a home, typically - is worth so much money, it’s reckless for anyone to put it at risk by trying their hand at deed drafting to save the cost of hiring a lawyer to do it. Some people see the wisdom of that approach and call an attorney. Others insist that they can’t afford an attorney and will have to do it themselves. At that point, all we can do is suggest they visit a law library for further assistance.

"How do I take someone's name off of my deed?"

A name is never physically removed from a deed. To "take someone's name off of a deed" means conveying that person's interest in the property back to you or to someone else.

If that person is still alive, this conveyance is done by recording a new deed (one that conveys the property from him to you or someone else). The filing fee for recording a new deed is $125. There is no blank form available to use in creating the new deed. We strongly recommend using an attorney to prepare the new deed.

The procedure is different if the person whose name is to be removed is deceased. In the case of married couples, most own real estate as "tenants by the entirety" which means there is a right of survivorship. When one spouse dies, his interest in the property is extinguished and the surviving spouse automatically becomes the sole owner of the property. There is no need to create a new deeds since nothing is being transferred. To show the change in ownership, however, a death certificate for the deceased spouse should be recorded at the registry of deeds. The filing fee for a death certificate is $75.

If the deceased co-owner was not a spouse, then an automatic transfer also occurs if the co-owners held the property as "joint tenants" - look at the deed by which you and the decedent became owners to determine if this is the case. If it says "joint tenants" you need only record a death certificate. If it says "tenants in common" however, there is no right of survivorship and the decedent's estate must be probated to convey ownership of his portion of the property to someone else.

"How do I put another name on my deed?"

"Put another name on my deed" means that you want to make someone else a a co-owner of your property. To do this, you must convey an interest in the property to that person. You do this by creating a new deed that conveys an interest in the property from you (the current owner) to you and the new co-owner. This new deed should then be recorded at the registry of deeds. The filing fee for a deed is $125.

If you are selling this interest in the property to the other person, you (the seller) must also pay an excise tax based on the sales price. The tax rate is $2.28 per $500 (although a sale for $100 or less is exempt from the tax).

The registry does not provide blank deed forms. Technically, you can prepare a new deed yourself, but we strongly advise you to hire an attorney to do this for you. There are many consequences to owning a property jointly with another, so besides preparing the deed, an attorney will also advise you and your options and their consequences.