Wednesday, July 30, 2014

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.

Monday, July 28, 2014

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.

Friday, July 25, 2014

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. 

Thursday, July 24, 2014

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.

Wednesday, July 23, 2014

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. 

Monday, July 21, 2014

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%)

Wednesday, July 09, 2014

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.