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.

A Page of History is Worth a Volume of Logic

The famous Massachusetts and United States Supreme Court justice Oliver Wendell Holmes Jr once wrote in a decision, “. . .on this point, a page of history is worth a volume of logic.” He was then discussing the estate tax, but his observation equally applies to real estate law. Without understanding the historic background of real property law, it doesn’t make much sense.

The basics of Massachusetts real estate law developed in medieval England. Back then, the king owned all the land, but he would grant portions of the land to favored subjects to use and manage in return for them providing him with soldiers and food. When the person died, the land would revert back to the king. Gradually, the king allowed the nobles to keep the land, sometimes for as long as they had a male heir, sometimes longer.

That is how estates in land came to be measure in terms of time. When the English first came to America, there were many different types of estates. Fee simple absolute was ownership for potentially infinite duration. Fee simple determinable was ownership that terminated or “determined” upon the occurrence of a certain event (“I grant you this property for as long as it is used as a church.”). Along with a fee simple determinable came something called a future interest which directs who is to own the property when the contingency occurs. If the deed creating the determinable fee is silent on that, ownership would revert back to the grantor or his estate.

Over time, almost all of these types of ownership that are less than fee simple were eliminated legislatively because public policy preferred the free transferability of land rather than these convoluted genealogical formulas or contingencies. So today, almost every conveyance is in fee simple.

There are at least two estates less than fee simple that remain popular today. One is a lease for a term of years. If I lease you my house for one year, your ownership estate is one year in duration. At the end of that year, the property reverts back to me. The other example is a life estate which is ownership measured in terms of someone’s life. If I grant my house to my heirs but reserve for myself a life estate, I own the property for as long as I am alive, but immediately upon my death, my heirs own it. At the time of the conveyance, the heirs receive an ownership interest, but it only becomes a possessory interest at some time in the future, hence the term future interest.

Other than lease and life estate, it is rare for these deed variations to make an appearance these days, but understanding what they were and how they operated makes understanding current real estate law much simpler.  

Elements of a Massachusetts real estate deed

According to Eno and Hovey, Real Estate Law with Forms, a standard Massachusetts real estate deed

contains the following elements:

Grantor – The name of the person/persons/entity transferring an ownership interest in the property;

Grantee – The name of the person/persons/entity receiving an ownership interest. When the property is being transferred to more than one person, the type of joint ownership (i.e., tenants in common, joint tenants, tenants by the entirety) should be stated. The mailing address of the grantee should be specified so the town assessor can mail property tax bills to the proper address;

Consideration – The amount being paid for the property. If the transfer is a gift or if there is no monetary consideration, the consideration on the deed is stated as ONE ($1.00) DOLLAR;

Words of Grant – Language that clearly expresses the grantor’s intent to convey title to the grantee;

Covenants – The promises regarding the state of the title granted (i.e., “with quitclaim covenants”);

Property Description – The land being conveyed must be described “with such particularity as to make it capable of identification.” At a minimum, the description must include the municipality in which the land is located, and must either identify the land as a particular lot on a recorded plan or include a “metes and bounds” description of the parcel, usually carried forward from the prior deed in the chain of title. The street address by itself is not an adequate legal description;

Title Reference – A statement identifying how the grantor became the owner of the property (usually the date and book and page number of the prior deed in the chain of title);

Property Address – The street address and town of the property must be written in the left margin of the deed so that town assessors can identify the property in their records;

Date of Execution – The date the deed is signed;

Grantor Signature – The signature of the person/persons/entity conveying the property;

Acknowledgement – Grantor signature must be acknowledged by a notary public;

Recording – Once executed and acknowledged, a deed should be recorded at the registry of deeds. The filing fee for a deed is $125, payable by cash or check. If the consideration being paid is $500 or more, a deeds excise tax assessed at the rate of $2.28 per $500 is due at the time of recording.

“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.

Usiing Real Estate for Bail

Going through some old papers, I came upon a copy of a mortgage recorded in 2002 between the property owner and the Clerk of the United States District Court for the District of Massachusetts as bail for the son of the homeowners who had been charged with a crime. Here is the relevant language from the mortgage:

The purpose of the mortgage was to secure a personal bond for [defendant] in criminal case number ####, before the US District Court for the District of Massachusetts in the amount of $100,000 executed by the defendant and the mortgagors in favor of the United States of America, and to secure due observance and performance of the obligation, terms and conditions set forth in an Order Setting Conditions of Release. And pursuant to an escrow agreement made this day between the Mortgagors, the United States Attorney for the District of Massachusetts, and the Mortgagee, the Mortgagors hereby mortgage, with power of sale, the following parcel lying in the County of Middlesex, Commonwealth of Massachusetts, and more particularly described in the following deed:

[deed parties, date and book and page].

I don't recall seeing another mortgage like this one. It is a reminder that a mortgage can be used to secure the performance of some act as well as the repayment of a debt, which is the purpose of most mortgages we encounter these days.

Book and Page Numbers & Their Evolution

From the beginning, registries of deeds in Massachusetts have not retained custody of original documents but have copied those documents in their entirety into bound record books and returned the original documents to their owners. At first, those documents copies were hand-written, then they were typed, then they were printed from microfilmed copies of the documents. Beginning in 1994, the Middlesex North Registry began scanning documents into a computer system. Shortly after that, record books were printed from those scanned images and, beginning in 2001, the registry ceased printing paper record books, replacing paper with electronic images of the documents.

Throughout this evolution of document reproduction, documents recorded at the registry of deeds have always been assigned a "book and page number." That is because the documents are copied into sequentially numbered books with the pages within each book being sequentially numbers. To look at a deed with "book 500, page 20" as its identifier, you would go to book number 500 and open it to page 20. There would be your document.

Historically, ever page within a record book was numbered. In the example above, if the document in book 500, page 20 was five pages long, it would have been assigned pages 20, 21, 22, 23 and 24. The next document to be recorded would begin on page 25.

Because record books held a finite number of pages - usually 300, but also 600 or even 800 in older times - it was necessary to "roll over" the book and page numbers to the next book with some frequency. Rather than doing this immediately as documents were being recorded, the registry deferred assigning book and page numbers until days after the documents were recorded. But customers needed some immediate indicator that a document was in fact recorded, so registries began assigning an "instrument number" to each document. These instrument numbers were sequential through the year and rolled over to instrument number 1 at the start of each new year. This duel process of instrument numbers assigned immediately upon recording and book and page numbers assigned later in the process gave registry personnel plenty of time to carefully compile new record books with the proper number of pages.

The arrival of computers changed all that. Programming allowed the recording counter computer system to assign both the instrument number and the book and page number right at the point of recording. All that was needed was to count the number of pages in a document and enter that number in the computer.

Counting the number of pages in a document is trickier than it may sound, especially with some documents like mortgage growing to 25 pages or more. If you only entered 24 pages, the next document would start on page 25 and you would not have space for you extra page. Similarly, if you entered 26 pages for the document, your next document would start with page 27 and you would have a blank page in your record book. We employed a number of tricks or techniques to address those discrepencies, but none of them worked very well.

Soon after we ceased printing paper record books in November 2001, it occurred to me that without a tangible book to thumb through, the only meaningful page number on a document was the first one. Starting in January 2002, we stopped assigning individual page numbers to the subsequent pages of a recorded document. At that point, the book and page number had morphed into a document ID number. While we still count the number of pages in a document, enter that in the computer, and expect that the page number of the next document fits the logical sequence, if we do make an error counting the pages, we simply correct the "number of pages in the document" field in our computerized index and don't worry about the page number of the next document.

The reason I am writing about this now is that a lawyer who was doing a title exam recently encountered a series of related documents that were relevant to his investigation. The first document in the sequence was two pages long and was assigned page number 1 of that "book", but the second document was assigned page number 5. If that was in fact the next document in the sequence, it should have been assigned page 3. The lawyer was concerned that there was another document in between these two that had somehow disappeared from our index that might affect his title.

As soon as I looked at the first document, I saw the cause of the number gap. We had initially written "4" at the top corner of the first document for the number of pages. Perhaps those first two documents were initially packaged as one and only after the first document was recorded as a four page document did we realize it was two separate two-page documents. Whatever the cause, we were left with a two-page gap in our numbering sequence. The explanation for that was easy to find, and if it was not a sequence of related documents, the lawyer looking at them never would have noticed the gap. So there was nothing missing, just a lawyer being prudent.

That's the story of how registry book and page numbers have evolved through the years. 

Lowell Atlases

One of the most useful tools I've found to research older land records are the city of Lowell insurance atlases that were created between 1879 and 1936. Published in color in large-format books, each atlas consists of a base map that shows the entire city divided up into "plates", and then the various plates, which are blow-ups of slices of the city.

These plates contain an incredible amount of detail, showing the outlines of each lot, the footprint of any building on the lot, color coding for the building type (yellow for wood, pink for brick, gray for stone), the last name of the owner of the lot, the square footage of the lot, and the street number.

Atlases exist for the following years: 1879, 1896, 1906, 1924, and 1936.

These atlases are all available online courtesy of UMass Lowell's library system. I prefer the online version to the original paper maps because with the superb clarity of the online images, users can zoom in to 300 percent magnification and read numbers and annotations that otherwise would require a magnifying glass to discern.

July 2017 Recording Statistics

Here are the number of deeds, mortgages and foreclosure deeds recorded in the Middlesex North Registry of Deeds during July 2017, compared to the same month in 2016:

Deeds: July 2017 - 654 deeds; July 2016 - 722 deeds; decrease of 9%

Mortgages: July 2017 - 852 deeds; July 2016 - 1028 mortgages; decrease of 17%

Foreclosure Deeds: July 2017 - 14; July 2016 - 30; decrease of 53%

Total documents: July 2017 - 5199; July 2016 - 5580; decrease of 7%

Middlesex North 2017 Holiday Schedule

The holiday schedule for the Middlesex North Registry of Deeds through the summer of 2017 is as follows:

The registry will be closed on the following days:

Monday, April 17, 2017 - Patriot's Day

Monday, May 29, 2017 - Memorial Day

Tuesday, July 4, 2017 - Independence Day

Monday, Sept 4, 2017 - Labor Day

The registry will be open on all other weekdays, including on Friday, April 14, 2017 (Good Friday).

Registry of Deeds: 10 am opening on March 15, 2017

Due to the lingering effects of today's storm, the Middlesex North Registry of Deeds and all state courthouses in the Commonwealth of Massachusetts will open at 10 am on Wednesday, March 15, 2017.

Registry of Deeds closed on March 14, 2017

Due to the impending blizzard, the Middlesex North Registry of Deeds will be closed all day on Tuesday, March 13, 2017.

All Massachusetts Courts will also be closed. https://twitter.com/MACourtClosings/status/841423163900723200

Delayed Opening: Monday, February 13, 2017

The Middlesex North Registry of Deeds will open at 10:00 a.m. on Monday, February 13, 2017 due to the winter storm.

All courthouses in Massachusetts will also open at 10 a.m. today.

Middlesex North & All Courts Closed Thurs Feb 9

From the Massachusetts Trial Court: @MACourtClosings

All court locations across the state will be closed tomorrow, February 9th, to ensure the safety of court users and court staff.

Because the Middlesex North Registry of Deeds is located within the Lowell Superior Courthouse, we will also be closed all day tomorrow, February 9, 2017.

Notice of weather-related closings

With the forecast for a substantial snowstorm tomorrow, here's a reminder of how you can find out of the Middlesex North Registry of Deeds is closed because of a weather emergency. Because we are tenants in the Lowell Superior Courthouse, the decision to open or close is made by the Massachusetts Trial Court. If this court closes, so does the registry.

The Trial Court website is promptly updated with information about weather-related closings. Here is the website address: http://www.mass.gov/courts/

As soon as I get the word of any closure (which would come from the above website), I would also post notice of that here.

Finally, if you do not have access to a computer, you may call the Trial Court's automated information line at any of the following numbers. They will have a recording with news of any court closings:

800-222-5178
617-742-8383
508-831-2499
508-491-2899