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

July year-to-date document totals since 2000

With July wrapping up in a few minutes, I took a quick look at the total number of documents recorded this year from January 1 until July 31 (seven months) and compare that to the number of documents recorded for the same period for each year back to 2000.

2014 - 29,833 documents
2013 - 42,111
2012 - 39,453
2011 - 32,531
2010 - 33,334
2009 - 39,435
2008 - 35,339
2007 - 40,886
2006 - 42,779
2005 - 49,646
2004 - 58,844
2003 - 93,024
2002 - 61,806
2001 - 52,186
2000 - 39,633

An Act clearing titles to foreclosed properties

Ever since the Ibanez decision by the Supreme Judicial Court several years ago, the validity of the title to homes that have a foreclosure in their recent past has been put into doubt.  Ibanez held that a mortgage being foreclosed must have been assigned to the foreclosing lender at least before the first publication of the notice of mortgagee's sale.  To be clear, the SJC's decision did not require that a formal assignment be recorded at the registry of deeds prior to that date; just that the assignment had been made between the original mortgage holder and the foreclosing lender.  Establishing compliance with this holding is a question of fact on a case by case basis and there's no easy or efficient way to make that determination.  Innocent third parties who purchased homes that had a foreclosure somewhere in the background are now locked into those homes until questions about the title can be resolved.  Also, many homes that are still owned by the foreclosing lender are unmarketable which further contributes to the lethargy of the real estate market.

In response to this predicament, the Massachusetts legislature is on the verge of passing Senate Bill 1987 entitled "An Act clearing titles to foreclosed properties."  Essentially, the bill establishes a three year statute of limitations for challenging the validity of a foreclosure.  After the passage of three years (from the later of the date of the foreclosure or of the enactment of this bill), the prior homeowner and everyone else would be barred from challenging the foreclosure.  This would resolve the title defects lurking in the back titles of so many foreclosed properties after three years, at least.

The Globe today has a front page story of the prospects of passage of this bill.  The full text of the bill is available on the state legislature's website.

Why you should hire a lawyer to create a deed

Almost every day a customer comes to the registry of deeds and announces "I want to add a name to my deed."  When we reply "you should hire a lawyer to do it." At that, many become indignant.  We explain that there are no blank forms of deeds available and that there are many variables and details that go into creating a new deed so while anyone could conceivably do it, we strongly recommend against it.

Today I came across an example of why it's inadvisable to start one's legal draftsmanship career with a deed.  The particular deed I saw conveyed the property to "John Smith and Mary Smith as husband and wife."  That was it.  There was no "tenants by the entirety."  Fortunately, the couple had conveyed away the property while both were still alive because that deed would have created a tenancy in common.  (Simply identifying the parties as "husband and wife" means nothing without the "tenants by the entirety" language).  Had one of the spouses passed away while still owning the property under that deed, the decedent's half of the property would have passed through his or her estate and not to the surviving co-owner.

Flood Insurance Premium Relief

Governor Patrick signed a new law yesterday that provides some potential relief to people who own homes in flood zones.  Previously, lenders could and often did require homeowners to obtain flood insurance for the entire value of the property.  This new law, however, gives the homeowner the option of obtaining flood insurance only in the outstanding amount of the mortgage.  For example, if someone owns a home that's worth $200,000 but only owes $100,000, that person can opt to obtain only $100,000 in flood insurance.  Of course, if the house is destroyed by flood, the homeowner's equity would vanish, but when the alternative is flood insurance premiums so high that people are driven to foreclosure, many will be willing to take that risk.  More information about this new law is available in this story from the Patriot Ledger. 

Two way traffic coming to downtown Lowell

This August the traffic pattern in downtown Lowell will undergo a big change.  The web of one way streets that have been in place for a half century will become two way.  The streets involved in this transition are as follows:

Central Street from Market to Merrimack which is currently one way heading towards Merrimack will become two way;

Merrimack Street from Prescott to Dutton which is currently one way heading towards City Hall will be two way;

Shattuck Street which runs from Merrimack to Market and is one way heading towards Market will be two way;

Market Street from Shattuck to Central which is one way heading towards Central will be two way. 

Dutton Street will remain two way and Middle and Palmer Street will remain one way as will Prescott Street. 

There will be new lane markings, cross walks, "no left/right turn" signs, and new parking regulations.  It will take a while for those who have known only the current system to get used to these changes and their consequences.  There are several reasons the change is being made.  One is to make navigating downtown Lowell easier and more direct; two is to calm traffic and thereby promote pedestrian activity; and three is that research has shown that retail districts do better with two way traffic.

Condo Docs

Today's Globe business page has a story about a bill pending in the legislature that would create financial incentives for condominium associations to quickly get condo owners copies of paperwork related to the operation of the condominium such as insurance policies and budgets when requested.  The bill seems to be in response to complaints that delays by associations (or by the management companies employed by associations) create major inconveniences and sometimes financial losses for owners trying to sell or refinance their units.

I'm not aware of the particulars of the bill but it's long been apparent from here at the registry of deeds that many condo associations have difficulty keeping up with the requirements imposed on them by law.  This is particularly true of smaller condo developments which lack the scale needed to make the employment of a management company affordable.  Individual homeowners trying to run the association on their own face a real challenge.  We constantly receive calls from people seeking copies of their "condo docs."  For us, that term means the master deed that first created the condominium and the declaration of trust that created the condominium association.  These can usually be found on our website (under the name of the condominium development or association) and can be downloaded and printed from there.  These two documents, however, often exceed 100 pages combined.  Other documents that are often lacking are those tracking changes in the makeup of the condominium board.  With each change there should be a document that details the departure of the former trustee and the election/acceptance of the new trustee.  This does not seem to be done routinely and often results in a last minute scramble when such documentation is needed by someone.

I'm not sure the legislation cited in the Globe story addresses these issues.  Perhaps some type of consumer handbook for condominium owners that simplifies the legal requirements of maintaining a condominium association would be worthwhile. 

Electronic Recording Statistics

Electronic recording continues to be a major part of our operations.  Here's a month-by-month breakdown of the number of documents recorded electronically to the total number recorded by all means:

January: 1373 of 3919 documents recorded electronically (35%)
February: 1126 of 3382 documents recorded electronically (33%)
March: 1307 of 3886 documents recorded electronically (34%)
April: 1683 of 4227 documents recorded electronically (40%)
May: 1516 of 4476 documents recorded electronically (34%)
June: 1766 of 5095 documents recorded electronically (35%)

First half of 2014: 7398 of 21066 documents recorded electronically (35%)

Mid year statistics

With the month of June in the past we can now look at statistics for the first six months of 2014 compared to the same period in 2013.  The trends are not good.

The number of deeds recorded in the first six months of 2014 was down 8% from the number recorded in 2013 (3045 vs 3313)

The number of mortgages recorded in 2014 was down 48% from the number recorded in 2013 (3948 vs 7623)

The number of foreclosure deeds recorded in 2014 was down 20% from the number recorded in 2013 (68 vs 85).

The number of orders of notice recorded in 2014 was down 26% from the number recorded in 2013 (153 vs 207)

And the overall number of documents recorded in 2014 was down 30% from the number recorded in 2013 (24973 vs 35884).

Back to blogging

For a couple of weeks I've refrained from posting here.  It started as only a day or two that was missed but then grew.  Future posts might not come every day but I will be consistently updating this site with new posts.  Thanks for sticking with it.

Tenancy by the Entirety Election

A recent email caused me to dust off my recollection of the distinction between “old” and “new” tenancies by the entirety.  Here’s the gist of the email:

Maybe 20 or 30 years ago there was an article in the Boston Globe about a new  law which took care of the following situation: A married couple owns a house, but they were just listed as tenants in common, not tenants by entirety.  At that stage of the game, the only way to rectify the ownership would be to sell the house to a "straw", and then have the straw immediately sell the house back to the couple, by entirety.  The law was enacted to allow the couple to simply fill out a declaration with the Registry (probably similar to homestead), instead of going through the selling and buy-back.  Can you tell me the name of the form?

Here’s my answer:

I think you're mixing up two concepts related to spousal ownership of property.

The law regarding property held as Tenants by the Entirely changed significantly in 1979.  Prior to that, the wife was deemed to have no ownership interest in the property other than the expectation that she might outlive her husband and only then become the owner.  The change in 1979 modernized the concept by giving both spouses equal ownership rights in the property while both were alive while also retaining the right of survivorship.  Which law controlled depended on when the Tenancy by the Entirety had been created.  If before 1979, the old law controlled; if after, the new law controlled.  It was in that context that the legislature enacted MGL c. 209, s. 1A which allowed a married couple with a pre-1979 tenancy by the entirety to "elect" to have it treated as a post-1979 tenancy by the entirety simply by filing an "election" document at the registry of deeds.  Here's the text of the statute:

"Section 1A. Tenants by the entirety holding under a deed dated prior to February eleventh, nineteen hundred and eighty may elect to have their tenancy treated as being subject to the provisions of chapter seven hundred and twenty-seven of the acts of nineteen hundred and seventy-nine; provided, however, that such election is made in writing, identifying the real estate with reference to the book and page of the registry of deeds wherein such deed is filed. Such election shall be executed by the grantees named as tenants by the entirety on the deed who are electing to be subject to this section, duly notarized, and recorded in said registry."

The second concept you refer to is the use of a straw.  Formerly, it was not permitted for someone to transfer property to himself.  If I owned property by myself, got married, and wanted to make my spouse a co-owner of the property, I could not execute a deed from me to me and my spouse.  Instead, I had to convey the property to a straw who in turn would convey the property to me and my spouse (my property professor in law school used to joke that the grantor index at the Suffolk County Registry of Deeds made Mary Maguire look like the wealthiest land owner in Boston, but that was just because she was secretary to the busiest real estate lawyer and she was grantor on countless straw deeds). 

At some point - certainly before the mid-1980s, either the law or the practice changed and it became acceptable to convey property to yourself.  Consequently, the use of straw deeds is extremely rare these days. 

There is a statute, c.209, s.3, which does mention property transfers between spouses ("Section 3. Transfers of real and personal property between husband and wife shall be valid to the same extent as if they were sole.") but I think the evolution of conveyancing law applied to all cases and not just married couples. 

I would think that if a married couple today owned property as tenants and common and wanted to convert to tenants by the entirety, the only way to do that would be to execute a deed from themselves to themselves specifying the new tenancy.  There may be another way; I'm just not aware of it.  In any case, it's something you should hire a lawyer to do for you so that lawyer would be in the best position to provide legal advice in your case.

Electronic Recording Statistics

With all Registries of Deeds in Massachusetts expected to begin offering electronic recording as an option by July 1, 2014 or shortly thereafter, that technology should gain increased attention in the coming months.  We've accepted electronic recordings since 2005 so it is standard operating procedure here in Northern Middlesex. 

For the first four months of 2014, 36% of the documents recorded here came to us electronically (5489 of 15414).  The monthly statistics show a slight increase in April.  Here they are:

January - 35% electronic recording (1373 or 3919)
February - 33% electronic recording (1126 of 3382)
March - 34% electronic recording (1307 of 3886)
April - 40% electronic recording (1683 of 4227)

April recording statistics

The statistical malaise in the real estate market continued through April with the overall number of documents recorded down by 30% from April of 2013.  Deeds were down 15%, declining from 582 in April 2013 to 497 in April 2014; mortgages were down 48%, declining from 1290 to 669; foreclosure deeds were down 26%, declining from 19 to 14; but orders of notice were up 41%, rising from 27 to 38.

While the year-to-year comparisons show a decline in recordings, month-to-month statistics in 2014 show that April was slightly up in most categories.  For overall documents recorded, it was the first month in 2014 that exceeded 4000 (we recorded 4227 with January at 3919 being the next busiest).  Also, it was the first time that the number of mortgages recorded in the month exceeded 600 - 669 to be exact with March's 593 the next busiest mortgage month.  The number of deeds recorded has been more consistent - consistently low, unfortunately.  One troublesome sign is the spike in the number of orders of notice which signal the start of a new foreclosure proceeding.  In April there were 38 orders of notice while March had 19, February had 25, and January had just 14.

2014 Holiday Schedule

Someone from a local bank just emailed with a request that I send the registry's holiday schedule for the remainder of 2014.  If one person is looking for it, others might be too, so here it is:

The following are the remaining holidays in 2014 on which the registry of deeds will be closed:

April 21 – Patriots Day

May 26 – Memorial Day

July 4 – Independence Day

Sept 1 – Labor Day

Oct 13 – Columbus Day

Nov 11 – Veterans Day

Nov 27 – Thanksgiving

Dec 25 – Christmas

Please note that we will be OPEN all day on the day after Thanksgiving, Christmas Eve and New Years Eve.

Updating Deed Indexing Standards

Earlier this week the Massachusetts Registers of Deeds Association met in Worcester and agreed to begin the process of updating the Massachusetts Deed Indexing Standards which were created back in 2000 and last updated in 2008.  The hope is to have this new version take effect on January 1, 2015.  We expect to have a draft available for public comment by July 1, 2014.

Here are some of the items we hope to clarify or address in the new version of the standards:

Acknowledgements

Update/explain list of documents requiring acknowledgement

Revisit requirements for out-of-state acknowledgements

Must acknowledgement clause state the name of the person who has signed the document (and not just “the person who signed above”).  In re Giroux, Bankruptcy case

Modification of Mortgage – signatures of all parties must be acknowledged?

Raised Seal – should it be shaded?

Mass. Uniform Probate Code

deed of distribution

disclaimer of property statement

Deed Excise Tax

Selling a stamp although no document is presented for recording?

Is excise tax due in a transfer for consideration if incident to divorce decree?

Names

Punctuation marks in names such as E*Trade or Amazon.com

Non-traditional names – which is first name; which is last name?

Deed of distribution – Code for “Personal Representative”

Affidavit relative to note signed by officer – just institution name or signatory name too?

Certified documents – adding book and page reference

1.