Middlesex North: 2016 Midyear Statistical Summary

The number and type of documents recorded at the Middlesex North Registry of Deeds during the first half of 2016 remained stable compared to the same period in 2015 although foreclosure-related documents were up by about one-third. Here are the numbers for major document types:

Deeds were up 17%, rising from 3018 in the first half of 2015 to 3520 in the first half of 2016;

Mortgages were up just 1%, with 5434 recorded in 2015 and 5505 recorded in 2016;

Foreclosure deeds were up 26%, rising from 86 in 2015 to 108 in 2016;

Orders of Notice were up 33%, rising from 185 in 2015 to 246 in 2016;

Overall documents were up 5%, from 28,249 in the first half of 2015, to 29,674 in the first half of 2015.

Electronic recording continues to grow. Of the 29,674 documents recorded in the first half of 2016, 14,701 (50%) were recorded electronically. About half of all deeds (1703 of 3520) were recorded electronically, but 68% of all mortgages (3735 of 5505) came to the registry electronically.

Major SJC decision on acknowledgements

HUGE decision from the SJC today in Bank of America v Casey

http://www.mass.gov/courts/docs/sjc/reporter-of-decisions/new-opinions/11943.pdf

Massachusetts Supreme Judicial Court answers questions certified to it from US 1^st Circuit of case originating in bankruptcy court. For registry of deeds purposes, the main issue is that the SJC holds that an acknowledgement clause that does not name the person or persons whose acknowledgement is being taken is DEFECTIVE and SHOULD NOT be recorded.

However, the decision also holds that an attorney affidavit properly drafted in accordance with MGL c.183, s.5B, may cure that defect on an already recorded document with a defective acknowledgement.

May recording statistics

Here are some recording statistics from May 2016 compared to numbers from last May:

This May, there were 635 deeds recorded, a 26% increase from last May (502)
. . . there were 1031 mortgages, a 15% increase from last May (895)
. . . there were 20 foreclosure deeds, a 17% decrease from last May (24)
. . . there were 48 orders of notice, a 55% increase from last May (31).
. . . there were 5194 documents recorded, a 12% increase from last May (4643).

Year-to-date, there were 2734 deeds recorded, a 22% increase from last year (2249)
. . . there were 4346 mortgages, a 3% increase from last year (4222)
. . . there were 96 foreclosure deeds, a 37% increase from last year (70)
. . . there were 213 orders of notice, a 50% increase from last year (142).
. . . there were 23631 documents recorded, a 10% increase from last year (21541).

April 2016 recording statistics

Recording activity remained stable in April compared to the prior month and to the same month last year.  Here are the numbers:

592 deeds were recorded in April 2016, a 11% increase from the 532 recorded in April 2015;
996 mortgages were recorded in April 2016, nearly the same as the 993 in the previous April.
10 foreclosure deeds were recorded, a 50% decrease from the 20 in the previous April
37 orders of notice were recorded, a 23% increase from the 30 recorded the previous April.


For year-to-date figures (January, February, March, and April of 2016) compared to the same four months in 2015:

Deeds were up 20%, from 1747 to 2099;
Mortgages were down slightly from 3327 to 3315;
Foreclosure deeds were up 65%, from 46 to 76;
Orders of notice were up 49%, from 111 to 165;
Overall documents were up 9%, from 16898 to 18437.

Mortgage Foreclosures

REMINDER: The Middlesex North Registry of Deeds (and all state and municipal offices) will be closed this coming Monday, April 18, 2016, for the Patriot's Day holiday.

In other news, the number of foreclosures is increasing in the Middlesex North District. In the first quarter of 2016, the number of foreclosure deeds recorded rose 154% (up from 26 in 2015 to 66 in 2016) and orders of notice increased 58% from 81 to 128.

Because such an increase is worrisome, I took a closer look at the foreclosure deeds for properties in Lowell. The mortgages that were foreclosed had almost all been originated prior to 2008 when the real estate market collapsed, so the distressed owners have owned these homes for at least six years. Have they suddenly become unable to make their payments or have they been in trouble for longer periods of time? Someone suggested to me that the latter case is most likely and that banks have just deferred any action on the properties. Now that values are increasing, however, the banks may have decided to go forward with these foreclosures. Although people already deeply in financial distress will be unlikely to salvage their homes, those who are current or just slightly in arrears, might be aided by rising values. If the current value of a property exceeds the amount owed on the mortgage, a home owner unable to make current payments could always sell the property, pay off the debt with the proceeds of the sale, and get on with life. True, they would still need a place to live, but it's probably better to have emerged as an arms length seller than as a person who lost a home to foreclosure.  

Tax Takings

The city of Lowell has scheduled a tax lien auction for April 27, 2016 at 10 am in the city council chamber at Lowell City Hall. In today’s Lowell Sun, the city advertised 226 different properties to be included in the auction. Because the city offers the properties in large bundles at such auctions, potential bidders hoping to snag a particular parcel by itself may be disappointed. At past auction, bidders have typically been fairly large companies in the business of buying tax takings. These companies than aggressively pursue the extinguishment of the right of redemption and thereby gain full title to the property which is then sold to a third party buyer.

From the city’s perspective, these auctions generate an infusion of cash late in the fiscal year. In fact, many of the parcel owners will show up at city hall in the next two weeks and bring their taxes current in which case their property will be pulled from the auction. Historically, the city would just treat these tax takings as a lien on the property and await the property’s sale or refinance at which time the back taxes would be settled. Because this disrupted revenue estimates and cash flows, the city opted to introduce these tax auctions a few years ago. The only downside of the auction is that occasionally a long-time homeowner, usually elderly or disabled, ends up losing their property to back taxes that come nowhere near the fair market value of the property. However, since this process has already occurred several times and there has been no outcry about inequitable results, I can only assume that the risk of an unfair result is more theoretical than real.

The Use and Misuse of 5B Affidavits

Massachusetts General Laws chapter 183, section 5B states 

Subject to section 15 of chapter 184, an affidavit made by a person claiming to have personal knowledge of the facts therein stated and containing a certificate by an attorney at law that the facts stated in the affidavit are relevant to the title to certain land and will be of benefit and assistance in clarifying the chain of title may be filed for record and shall be recorded in the registry of deeds where the land or any part thereof lies.

Some registers of deeds across the state – including me - have found that these “5B” affidavits are sometimes used not to clarify the chain of title as required by the statute, but to cloud the title with information that, as a practical matter, constitutes an encumbrance on the property. Given the strong public policy against allowing encumbrances to be created without judicial or specific statutory authorization, do the registries of deeds have the authority to refuse to record a 5B affidavit that has the effect of tying up the property, not clarifying the title?

However, I am also of the opinion that by requiring an express, written certification by an attorney “that the facts stated in the affidavit are relevant to the title to certain land and will be of benefit and assistance in clarifying the chain of title,” the statute places the authority for making that determination on the attorney and that the registry of deeds may be powerless to second guess that determination.

The last sentence of the section – that such an affidavit “shall be recorded in the registry of deeds” – does raise a question of who the “shall” is directed to. Is it to the attorney, telling him or her that such an affidavit must be recorded? Or is it directed to the registry, commanding us to record a 5B affidavit, however, egregious we feel its content may be?

The registers of deeds association will discuss this in upcoming meetings. If any readers have an opinion on this issue, please share it here as a comment or send it to me directly at mailto:lowelldeeds@comcast.net.

Updating Massachusetts Deed Indexing Standards

The Massachusetts Registers and Assistant Registers of Deeds Association met on Tuesday at the Worcester Registry of Deeds to begin the task of updating the Massachusetts Deed Indexing Standards. Originally adopted on January 1, 2000 and revised in 2006 and 2008, the Indexing Standards continue to be a valuable tool for registries and for those who use registries. The new version, which we hope to make effective on January 1, 2017, should reflect the many technological, statutory, case-law, and registry practice changes that have taken place in the past eight years.

Our tentative timetable is to have a new draft tentatively adopted by the registers' association by the end of the summer and then publicly share the draft and solicit comments on it from those in the legal and conveyancing community. Once those comments have been received, the registers' association will adopt a final version and share it publicly prior to the end of 2016.

As milestones are met in this process, I will write about them here. In the meantime, if you are unfamiliar with the current Massachusetts Deed Indexing Standards, they are available in PDF form on the Middlesex North Registry of Deeds website.

Electronic Recording Statistics

Here are some statistics for electronic recording for the first three months of 2016:

In January, 49% of all documents (2130 of 4378) were recorded electronically. The busiest efile day was January 12, when 82% of all recordings (157 of 191) were electronic.

In February, 46% of all documents (1945 of 4236) were recorded electronically.

In March, 50% of all documents (2465 of 4945) were recorded electronically.

End of Month; End of Quarter Statistics

Here is our recording volume of certain document types for March 2016 compared to March 2015, followed by the same comparison for the first quarter of the year:

March 2015 v March 2016
Deeds were up 20% (486 v 580)
Mortgages were down 10% (982 v 886)
Foreclosure deeds were up 106% (16 v 33)
Orders of Notice were up 117% (24 v 52)
Total documents were up 3% (4796 v 4945)

1st Quarter 2015 v 1st Quarter 2016
Deeds were up 24% (1215 v 1507)
Mortgages were down 1% (2334 v 2319)
Foreclosure deeds were up 154% (26 v 66)
Orders of notice were up 58% (81 v 128)
Total documents were up 13% (11,952 v 13,559)

Doctrine of Merger

A homeowner came to the registry today looking for a subdivision plan that shows his property. I helped him find it, and his deed. He pointed out how he has owned two lots, each 5000 square feet, for several decades, then went on to say that even though the current zoning ordinance calls for minimum lot size of 10,000 square feet, he still had two building lots because when he purchased them long ago, they complied with the zoning ordinance in effect at the time and so they were "grandfathered in."

I urged him to check with a lawyer about it and suggested among the things he discuss with the lawyer was something called "merger."

As I recall, the doctrine of merger, it holds that when two contiguous lots come under common ownership, they merge together to form a single lot. If this concept applied to zoning, his two "grandfathered lots" may have become a single complying lot when he gained ownership of the second of the lots.

I wasn't doing a good enough job of explaining what merger meant, so finally I asked "have you ever cooked pancakes?" He asked me to repeat the question at least twice before he decided that yes, I had asked him if he had cooked pancakes. "Yes, I've cooked pancakes." So I said, "If you have a smallish frying pan and drop in two scoops of batter intending to make two pancakes, but they spread out and connect together, you end up with one big pancake, not two little pancakes. That's the doctrine of merger." The guy smiled and said "I like that. Now I understand."

And now that my mind is fixated on pancakes, I might be stopping at the Owl Diner tomorrow for breakfast.

Missing out on the Community Preservation Act

The Community Preservation Act was signed into law in Massachusetts about 15 years ago. The purpose of the law was to encourage and to assist communities in preserving open space, creating affordable housing, and conducting historic preservation. To utilize the CPA, residents of a community would have to impose a surcharge of up to 3% on their property taxes. As an incentive to do this, the state would match the funds raised by the surcharge. To fund the matching amounts, the state imposed a surcharge on recording fees at the registry of deeds. Almost all documents carry a $20 surcharge (municipal lien certificates have a $10 surcharge and homesteads and state and federal tax liens are surcharge-free).

In today’s Boston Globe, op-ed columnist Renee Loth urges the city of Boston to adopt a CPA proposal filed by two city councilors (“Boston is losing out bynot adopting the Community Preservation Act”). Here’s how the column begins:

Those lucky folks in Acton. Over the past several years, they have purchased more than 30 acres of farmland and open space, created a wildflower garden and accessible boardwalk at the Acton Arboretum, and started work on their section of a 22-mile rail trail from Lowell to Framingham. In Gloucester, residents have leveraged funding for 80 units of affordable elderly housing in an old grammar school, replaced historic lead glass windows at the Cape Ann museum, and restored Depression-era WPA murals at City Hall. In Cambridge, they have preserved hundreds of affordable rental units that were about to expire, stabilized an eroding slope at Fresh Pond to protect drinking water, and transferred millions of dollars into a housing trust fund. All these communities – and 157 others – recognize the value of protecting their economic, environmental, and cultural assets through the state’s Community Preservation Act.

She spends the rest of the column arguing that it is short-sighted for Boston to continue to ignore the CPA.

You could say the same thing about Lowell. Because even the slightest property tax increase creates much angst in Lowell, it seems unlikely that the voters—especially the small percentage who actually vote in city elections—would volunteer to increase their property taxes, even if the amount of the increase was matched by the state.

What makes it even more short-sighted for Lowell to forego the CPA is that it’s not really the state that’s providing the matching funds; it’s the property owners of Lowell. From 2008 through 2015 here at the Middlesex North Registry of Deeds, we have collected $9,328,900 in Community Preservation Act surcharges for an average of $1,166,112 per year. Although the district consists of ten communities (Billerica, Carlisle, Chelmsford, Dracut, Dunstable, Lowell, Tewksbury, Tyngsborough, Westford, and Wilmington), Lowell accounts for 22% of all documents recorded.

Given those numbers, property owners in Lowell have contributed $2,052,358 to the Community Preservation Fund, all of which has benefitted communities like Acton, Gloucester, and Cambridge. Maybe it’s time for the property owners of Lowell to get some return on their CPA investment.

More on Registry Standardization

In my preceding post, I discussed the process of selecting the ACS computer system and how that was intended to become the standard system in Massachusetts. Unfortunately, that did not happen. Here is a list of registries in Massachusetts (in alphabetical order) along with the computer system they are currently operating. Whether the registry is "state" or "county" is also indicated:

1. Barnstable - Browntech - county
2. Berkshire Middle - ACS - state
3. Berkshire North - ACS - state
4. Berkshire South - ACS - state
5. Bristol Fall River - ACS - county
6. Bristol North - ACS - county
7. Bristol South - ACS - county
8. Dukes - ACS - county
9. Essex North - Browntech - state
10. Essex South - in-house system - state
11. Franklin - ACS - state
12. Hampden - Browntech - state
13. Hampshire - ACS - state
14. Middlesex North - ACS - state
15. Middlesex South - ACS - state
16. Nantucket - ACS - county
17. Norfolk - Browntech - county
18. Plymouth - ACS - county
19. Suffolk - ACS - state
20. Worcester - ACS - state
21. Worcester North - Browntech - state

State v county, 13 registries are state; 7 are county

ACS v Browntech, 15 use ACS, 5 use Browntech, and 1 uses an in-house system

Of the 13 state registries, 9 use ACS; 3 use Browntech, and 1 uses an in-house system.

Of the 7 county registries, 5 use ACS and 2 use Browntech.

Registry of Deeds standardization

This is a follow-up to Thursday's post about my involvement in a Real Estate Bar Association (REBA) program earlier this week (I wrote this on Friday but inadvertently did not publish it until today, Monday, March 21, 2016). During our panel discussion, several audience members asked about the elusive topic of standardizing registry computer systems. I was able to give a brief reply then, but since it is a topic of broad interest, I thought I would explore the topic in a series of blog posts. Today, I offer a history lesson on how the ACS system came to be selected for use in so many registries of deeds:

1. Back in the late 1990s, after several counties had been abolished, the Secretary of State's office began working closely with registers of deeds in Cambridge, Lowell, Worcester, and Greenfield, the only registries using the Wang computer system, and with the register from Northampton, were a system by Perceptics was in use. Neither Wang nor Perceptics was capable of handling dates beyond the year 1999.
2. Because December 31, 1999 was a hard deadline and because the process of selecting a new computer system was a lengthy one, the Secretary's office and the registers decided to "remediate" the computer code in use on Wang and Perceptics so they could operate beyond 1999 and to defer the search for the new system until after January 1, 2000.
3. However, since all involved knew that any replacement system would use Windows-compatible PCs on a wide area network, we used funding available for Y2K preparation to acquire and install the hardware and infrastructure that would be needed for the new system, whatever that system might turn out to be, prior to January 1, 2000.
4. Y2K passed without incident.
5. In 2000 and early 2001, the bursting of the dot-com bubble caused state revenue collections to plunge. As a result, the funding for a new computer system was frozen.
6. In the spring of 2001, after an indication that state Information Technology (IT) Bond that was to be used for new registry computer systems might soon become available, the five registers of deeds and the Secretary of State's office began a system selection process. A RFP was issued, vendor demonstration days were held, and site visits were made to registries of deeds in Chicago, Illinois; Philadelphia, Pennsylvania; Wilmington, Delaware; and Charlotte, North Carolina; to see the systems of the top respondent computer companies in action.
7. Although the new system would initially be installed in just these five registries, the RFP (and the philosophy of all involved) was that this new computer system would eventually be used at every registry of deeds in the state. The timetable for replacements in other registries was not firm; the understanding was that as existing computer systems needed replacement, the ACS system would be installed. But, if an existing computer system was working satisfactorily and the register of deeds in that office wished to continue using the system, no new system would be forced on that registry.
8. In April 2002, ACS was selected as the "target migration system." The first installation, in Lowell, became active on July 1, 2002. The other four registries followed in succession. Afterwards, many but not all of the registries in Massachusetts shifted to ACS which is now in place in a majority of registries in the Commonwealth.

REBA Update on Registries of Deeds

Yesterday I traveled to the new headquarters of the Real Estate Bar Association of Massachusetts (REBA) at 295 Devonshire St in Boston to participate in a panel discussion. The name of the event was "Escape from the 19th Century: An Update on the Evolving Registries of Deeds."

At the conclusion of the 90-minute program, an audience member asked me if I was "the one who wrote the blog" and said how useful and enjoyable he found it. He very tactfully used the present tense since I have fallen out of the habit of posting here. Being reminded that there is an audience for online registry news and information has prompted me to return to the blog today (and hopefully for many days to come).

My portion of the talk was mostly about the use of technology at the registry of deeds. Computers have definitely transformed the way title examinations are conducted. Opinions differ substantially on whether that's a good thing or a bad thing. It should not come as a surprise that I believe our use of technology at the registry has been a great advancement, however, I also am the first to say that it - particularly our website - could be much better than it is. All I can say is that we're working on it.

In the bigger picture, it was clear to me that all three segments of the conveyancing community involved in yesterday's discussion - title examiners, closing attorneys, and registers of deeds - are existentially threatened by technology. While real estate law and the interpretation of real estate documents has been and will continue to be incredibly complex, the act of recording and retrieving documents is not, and so technology threatens not only to change how those things get done, but to greatly reduce the market for people who perform those tasks. That's a given. What is not a given is the response of those whose jobs will change as a result of technology. As I said in my closing remarks yesterday, never in history has a group whose livelihood has been threatened by advances in technology succeeded in holding off that technology. Trying to do that just accelerates one's demise. The better response is to embrace the technology and get ahead of it. Doing that increases efficiency, provides better service, and yes, allows one to remain relevant.

Registry of Deeds closed Feb 8, 2016

The Massachusetts Trial Court has closed all courts in Middlesex County due to today's snowstorm. This means the Middlesex North Registry of Deeds will also be closed for the day.

http://www.mass.gov/courts/sitealertlanding.html#2196109

2015 Recording Statistics

The number of documents recorded in all major categories was up in 2015 compared to 2014:

Deeds increased 5% from 6561 in 2014 to 6913 in 2015;
Mortgages increased 21% from 9190 in 2014 to 11148 in 2015
Foreclosure deeds increased 35% from 155 in 2014 to 209 in 2015
Orders of Notice increased 38% from 347 in 2014 to 479 in 2015.

Total documents increased 13% from 53,584 in 2014 to 60,516 in 2015.