The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell
At a recent gathering of all of the state’s registers of deeds, we received updates on the state of electronic recording around the Commonwealth. As readers of this blog know, we have been recording documents electronically here in Lowell since June 2005 with more than 5000 documents finding their way into our records via this means. Now, three other registries have joined us: Plymouth began electronic recording back in late 2007. They are proceeding gradually, just accepting discharges from a few local customers right now. Hampden (in Springfield) has been working closely with a company called LandData and that registry is ready to launch its e-recording system. And Worcester is in final meetings with ACS and Simplifile to allow both of those companies to submit documents.
The Community Preservation Act became law in September 2000. The intent of the law is to help communities preserve open space and historical landmarks (Excuse me, I know I’m simplifying). A community receives CPA funds only if it assesses a surcharge on local taxpayers. The law also established a $20.00 surcharge on every document recorded at the registeries of deeds in Massachusetts. This money presently funds the Community Perservation Act. Since the time of its enactment all participating communities have receievd 100 percent matching funds. Last Sunday the Boston Globe ran an interesting article on the current state of the CPA funding pool. For the first time since the inception of the act 100 percent matching funds may not be possible. According to the Globe two factors contributed to the pool’s shrinking the resources. First, the number of communities participating in the CPA has increased to 127. Second, and most notable to us, the funds being collected from the registries of deeds has decrease dramatically. According to Stuart Saginor Executive Director of the Community Preservation Coalition…“ We had anticipated this all along. Not in our wildest dreams did we imagine that it would be a 100 percent match” (Boston Globe). Whether anticipated or not many local communities are being forced to re-adjust their CPA spending strategies. After looking at the stats for January 2008 …there many be even more need for adjustment in the coming years.
The Massachusetts Appeals Court issued its decision in Patriot Resorts Corp v. Register of Deeds for Berkshire North (No. 06-P-725), a case that may change the way that registries of deeds around the state calculate some recording fees. Patriot Resorts was the developer of a time share resort in the Berkshires. Buyers of time shares would receive a deed to the unit for a set period of time and, in most cases, a mortgage from Patriot Resorts. As a developer and not a bank, Patriot Resorts would quickly assign those mortgages to another financial institution. Rather than put one assignment on one piece of paper, Patriot would bundle dozens, if not hundreds, of assignments together in a single document. Following the accepted method of pricing documents, the Northern Berkshire Registry would charge a separate recording fee for each assignment. With recording fees reaching six figures, Patriot filed suit and, when a Superior Court judge ruled in the registry’s favor, appealed. By a two to one decision, the appeals court reversed the judgement of the Superior Court, holding that the applicable statutes did not permit the registry to charge multiple fees for multiple document. While this case has far reaching implications, we will maintain the status quo for now until a decision is made on whether to seek further judicial review of this matter.
Our Record Book re-scanning project just got “kicked up a notch”. For the past two months we have had one employee checking images in our older Record Books while another did the re-scanning. The project is moving along nicely but last week we decided to increase the pace. We “kicked it up a notch” by adding four people to the image checking process. The instructions we gave them were pretty simple: Check every 50th page… if “any” of the images are illegible or missing, mark the book as “needs to be re-scanned”. Since these images were originally taken from microfilm, there is a wide variety of problems. Some images are too light, some too dark, and some too small. We started with book 2600 a month ago and have worked our way down to 2500. With the additional help the results should quadruple…
The Lowell Sun contains a front page story today about the report on 2007 foreclosures in Lowell that we recently prepared. We are now preparing a similar report for the nine towns in our district. The preliminary research shows that the findings will be quite different. In Lowell, the majority of the foreclosures were of “purchase mortgages” which are those (usually there were two) mortgages used to purchase the property. In contrast, foreclosures in the towns are predominantly refinanced mortgages. As soon as this report is ready we will publish it here.
Today’s newspapers suggest that the Federal Reserve’s historic rate cut on Monday and the animated discussions in Washington on the urgent need for an economic stimulus package are primarily motivated by the precarious position of two large insurance companies that have guaranteed bond buyers against losses on more than $1 trillion of bonds. The two companies, Ambac and MBIA, historically have insured municipal and governmental bonds. If the city of Lowell issues a bond to raise money to construct a parking garage, let’s say, the bond will be more attractive to buyers if it is insured against default. An attractive, or more highly rated bond, allows the city to raise money at a much cheaper rate. During the real estate & credit boom of the past half decade, these bond insurers ventured into other bond fields, particularly bonds backed by subprime mortgages. As the foreclosure rate of these mortgages continues to climb, the chances of the bonds they secure defaulting grow as well thereby increasing the risk of loss to their insurers. If the insurers become insolvent because they have to pay out too much in losses because of foreclosures, everyone else that they insure – municipalities especially – will find the bonding process infinitely more expensive. I don’t fully understand all of this; I suspect one would need a PhD in Economics just to begin to grasp how this all relates together, but it is clear that the fiscal health of these two companies seem to be critical to the continued stability of our economy.
“Feet don’t fail me now”, Who said that?… Wasn’t it Ernest or Julio Gallo? No, no I think it was Olympic gold medalist Bruce Jenner’s mantra. And it may well become the mantra of Tom Brady and Patriot fans all over New England. When the Patriot’s faithful saw Tom Terrific wearing a foot-boot yesterday there was a collective gasp. A little story…Yesterday morning my wife and I watched the early morning news together. There was our Tom limping toward his girlfriend’s apartment…flowers in hand. My wife turned to me… “look at those flowers” she said, “you’d think a guy with his money could afford a better bouquet than that”. “What! Are you kidding,” I responded…”look at the other guy walking behind him. HE should be carrying those flowers? Brady shouldn’t be carrying any additional weight in his condition. You never know, it might aggravate the damaged ankle… And so the day went on here in New England. Our minds just couldn’t wipe away the image of “little Jonathan Brady’s” dad in a foot-boot…There was speculation (would the Pats play that other guy? What’s his name?). There was nervousness (oh my, what if they do play what’s his name?) and most of all there was anxiety (Bruce Jenner’s chant could be heard in every corner of New England… “Foot don’t fail us now”, “foot don’t fail us now”). By afternoon my tension had turned to paranoia (soooo, who stepped on Brady’s foot? WHO DID IT!?… Manning?, No not, Eli! The other evil brother, Peyton. Where was he? WAS IT HIM!?). But fortunately the day ended with a restoration of reason…Tom Terrific was seen strolling out of a New York restaurant wearing Cowboy boots, no foot-boot. Thank you Bruce Almighty…But wait, ”New York”? “Cowboy” Boots?…is Belichick hiding something from us? We’ve got another twelve days of this…
For some reason on Sunday morning I went to www.masslandrecords.com to look up some property records. The site was down. I reported it to a contact at the Secretary of State’s office who informed the IT folks. I’m not sure when they were able to get to it, but the site came back online yesterday (Monday - the Martin Luther King Day holiday) at about noon. While the site was down, I received a dozen or so emails from what appeared to be first-time users complaining about our “lousy website.” I think our regular users were familiar enough with the workings of our site to know it was a temporary problem, but it was clear that first impressions mean a lot. I replied to each of the emails explaining the situation and sent additional replies yesterday when the site came back online. As for the cause of the outage, it appears to have been a software or programming issue that involved the firewall that protects the database from intruders. While it’s unfortunate we had any outage at all, this type of issue is less worrisome than a major equipment or software failure, neither of which has occurred for several years.
DUC is my acronym for the “doctrine of unintended consequences,” something we run into often here at the registry. Sometimes it’s for the good; sometimes not. My favorite example occurred early in my tenure here. I was concerned about our ability to recover from a catastrophic loss of our record books despite the accepted wisdom that “everything’s backed up on microfilm.” I wanted proof. So I took one of our oldest books off of the shelf and stuck it in a filing cabinet in my room. I then told the person who was responsible for our microfilm that the book had been misplaced and that in case it didn’t show up again, I’d like to see what kind of replacement pages our microfilm would yield. A few days later she returned with pristine paper copies of the first ten pages of the book and told me that our microfilm company had scanned the microfilm to create those images. By that time (it was 1995), I already knew something about creating digital images from paper on a flatbed scanner, but I had never heard of scanning microfilm. We looked into it and soon we were shipping off mass quantities of our microfilm to be scanned in bulk. By 1999, every document in our possession from 1987 back to the 1600s were transformed into digital images by this method.
Our most recent run-in with DUC (Doctrine of Unintended Consequences) does not have such a happy ending. Several years ago we went through all of our digital images and “redacted” (blacked out) social security numbers. We only did it in our electronic documents, not in our record books. These days, we are trying to improve the quality of our digital images by rescanning many of them, this time from the original books and not from the microfilm. (This method yields a much better image). The project is proceeding nicely, but we just realized that the books we are rescanning have the social security numbers in them. We don’t want to blacken out the SSNs in the record books, so we’re going to go back and do it to the electronic images even though we’ve already done it once.
Yesterday I attended a meeting of the REBA Registry Committee at the REBA (Real Estate Bar Association of Massachusetts) headquarters in Boston. The main topic on the agenda was electronic recording and that proved to be an interesting discussion with both sides (the registers and the attorneys) sharing their questions and concerns. But I’ll leave that to a future post because I learned of pending legislation that may be of interest to some of our readers. MGL c.183A, s.9 has always required a copy of the floor plan of a condominium unit to be recorded a along with the first deed to that unit. At this registry, at least, we have left that to the honor system since it would be impractical for us to ascertain whether a deed represented the first deed for that unit or whether it was a subsequent one. But while we will let your deed get on record even without the required plan, the absence of that plan could create a title defect. So a bill to abolish this requirement has passed both houses of the state legislature and is now on the governor’s desk awaiting his signature. Governor Patrick is expected to sign it any day now, but there is no emergency preamble was the amendment to the law will not take effect for 90 days. The amendment also retroactively cures any deeds that omitted the required floor plan which should be of some relief to real estate practitioners.
Congratulations to Lowell City Manager Bernie Lynch who launched a blog last week. As the following quote makes clear, City Manager Lynch clearly understands the value of technology in communicating with constituents of government. Here’s what he said about blogging:
Recently, I came across this quote in reference to blogging, “tell your story or someone will tell it for you” or more to the point, “blog or be blogged”. The blog is yet another facet in the full spectrum of communication this office has employed over the last year plus. Blogs provide immediacy to the flow of information, allow for an interactive exchange of ideas and ideally, elevate the discussion. I’ve gotten my toes wet in the information stream through monitoring and occasionally posting on some of our local blog sites such a www.leftinlowell.com, www.richardhowe.com and www.jackiedoherty.org as well as on the Lowell Sun’s community blog. These postings have been responses to issues raised on these sites in which I feel some additional information or perspective is warranted. Now, I feel is time to be proactive and jump in with a blog of my own.
Good luck to our newest blogger. Please mark the Manager’s site as one of your favorites.
Today’s a big day…a really big day. No, not because Michigan’s Presidential Primary is today (that’s important too), rather today Steve Jobs, CEO of Apple speaks at MacWorld. This year MacWorld takes place at The Moscone Center in San Francisco. For the past few years Jobs has used his keynote speech at MacWorld to introduce a new device or company change that startled the computer/consumer world. Last year it was the incredible iPhone. The year before, Jobs announced that Apple would begin installing Intel processors in Mac Computers (I know, no big deal to you , but it was to Apple geeks). But experts are expecting this year’s MacWorld to be much calmer…. “You can’t make your business on splashy new stuff all the time”, said Van Baker, an analyst with Gartner, a marketing research group. According to MercuryNews.com “the announcements…at this year’s conference are likely to be much more incremental than revolutionary”. But the truth is you never know…rumor has it that Jobs will unveil an Ultra-portable lightweight laptop. The screen will be 13” and in true Apple style it will be strikingly slim and handsome. So as you’re waiting for the Michigan voting results tonight keep your ear tuned for Job’s announcements.
View from Registry, Gorham St
View from Registry, Gorham St
View from Registry, Parking Lot
View from Registry, Elm St
It is 10:00AM. We have recorded only 14 documents so far …13 are e-recordings and 1 mortgage just went on. The snow continues to fall at a rapid pace here in the Merrimack Valley. I image as the storm weakens later today, more people will arrive to conduct business. The custodial staff was here early and has done a nice job keeping up with the snow.
Although it was difficult to concentrate during today’s January thunderstorm, I spent the day investigating the circumstances surrounding foreclosures in Lowell during 2007. We’re only half way through our analysis but several things jump out. The majority of the foreclosures or of purchase mortgages, meaning the mortgage used to buy the property. In almost all cases, the buyer financed 100% of the purchase price, so they had no equity in the property and were essentially renters. Some percentage of foreclosed properties did belong to what I’ve come to call serial refinancers - people who owned the homes for a number of years, who purchased the property at what would be considered an amazingly low price, but then extracted equity from the home as its value went up. Of 59 such cases, I found that the average homeowner in this category had 4 mortgages during their ownership of the home and that the mortgage that was foreclosed was on average worth $60000 more than the purchase price of the home. These are only preliminary figures and will probably change when all the cases have been entered, but they do give us a glimpse into what’s been happening with housing in Lowell.
Don’t be surprised if there’s a big increase in the number of foreclosure deeds recorded this month; but don’t be unduly alarmed by it either. It appears that the big national lenders who were prime movers in creating this mess in the first place may be delaying the recording of foreclosure deeds, presumably to improve the appearance of their end of 2007 financial reports (i.e., a mortgage, even a non-performing one, probably looks better than a foreclosed property). It’s not unusual for there to be a delay between the date of the foreclosure auction and the execution of the foreclosure deed. The high bidder at the foreclosure is normally given 30 days to line up financing and to consumate the deal, and that 30 days can be easily extended. But once the foreclosure deed is signed and delivered, it’s normally recorded right away, certainly within a couple of days. That’s not the case with the seven foreclosure deeds that have been recorded since the first of the year. They were executed on May 10, Sep 21, Oct 24, Nov 15, Nov 29, Dec 17 and the seventh is not dated. The actual auctions for these deeds took place on Feb 26, Jul 12, Aug 22, Sep 12, Sep 25, Oct 12 and Nov 14 (all dates in 2007).
Today’s Globe reports that the president of the Federal Reserve Bank of Boston predicted yesterday that the current housing slump could be the worst in 50 years and that the prospects for a rebound in 2008 are bleak. Describing an interconnected, downward spiral, Eric Rosengren told how declining housing values have curtailed consumer spending in each quarter since the beginning of 2006 and that this declining consumer spending is in turn suppressing home prices. Especially ominous is the fact that the all of this has happened during a period of relative strength of the economy with historically low interest rates. Should the overall economy go into decline - and every indication is that it is - housing prices will be driven down faster and further than has been the case to date.
Remember the new numbering system we instituted last week? The one to match the correct person to the correct documents. Well, I am happy to report it is working out fine. As I mentioned in an earlier post we still want to put your name on the recipt also. You’ll get the document ID number immediately after giving us your name at the recording counter. The double identification procedure (name and number) is working well… and best of all many people seemed relieved that they no longer have to remember the address of the property of their documents. I think this system will stay in place for a long time.
For he’s a jolly good fellow
For he’s a jolly good fellow
For he’s a jolly good felllllooooow
That nobody can deny.
This jolly good fellow is none other than Microsoft founder Bill Gates. Last week Gates gave his Swan Song at the high-tech world’s mega-conference in Las Vegas. Four thousand people listened as the riches man in the world told the crowd…”This is my last keynote. This will be the first time since I was 17 that I won’t have my first full time job at Microsoft”. Factiously, I call Gates a “jolly good fellow”. This is a man with a reputation for being a callous, calculating businessman. But at this event, his last tech conference, Gate went out of his way to humanize himself. Here is how… He showed videos of himself looking for a job. Let me quote directly from Forbes.com…
Bill then looks for a job: he tries calling Bono (U2) and asking if he can join the band. Bono turns him down, “We can’t just replace Edge because you’re good at Guitar Hero,” he explains. Jon Stewart painfully listens to Gates request to be a co-anchor, then pretends he’s on his personal jet and the phone connection drops out. More cameos follow, an embarrassment of riches by the richest guy on the planet: He calls George Clooney, Steven Spielberg, Hillary Clinton and Barack Obama (who asks him “Who’s this? Bill who? Bill Clinton?).
“Business despot” or “jolly good fellow”, whichever… you can’t deny the impact Gates has had on the world..and rumor has it he doesn’t really need a job.
Whenever I get in a discussion about the ongoing mortgage crisis, someone inevitably says “I have no sympathy for these homeowners – they knew what they were getting into when they borrowed the money” or “These lenders are getting what they deserved – they knew the risks they were taking when they made these loans.” While these sentiments are both true (while a bit hard hearted as far as the homeowners are concerned), they also ignore the fact that the harm caused by the mortgage crisis is not limited to the lenders and borrowers directly involved in bad loans. A good example of the reach of this crisis is contained in a story in today’s Globe about investment losses sustained by the city of Springfield. Still under the supervision of a financial control board imposed by the state because of the city’s financial crisis of a few years ago, Springfield was painstakingly setting aside money for a stabilization fund, an amount that had grown to nearly $14 million. That fund is now worth only $1.2 million because it was invested in mortgage backed securities issued by Merrill Lynch. When a mortgage company loans someone $300,000, but when the borrower defaults a year later and the house is sold at auction for $150,000, that means another $150,000 is lost, never to be repaid to the investors who put up the money in the first place. Many such investors were municipalities, pension funds, insurance companies and other large institutions that believed their money was in secure funds and at minimal risk. As this mortgage crisis continues to unfold, losses like that just sustained by Springfield will become the big story.
Today’s Globe has an editorial praising the Boston Public Library’s plan to raise $6 million to fund the scanning and transition to the internet of 60 million pages of federal government documents including all Federal Appeals Court decisions since 1950 and all decisions of the U.S. Supreme Court. The Globe rightly points out that the BPL effort by itself will overwhelm the casual internet user with hordes of raw data and sees that the true value of this effort is to put this raw material out there for creative and motivated individuals to repackage in a way that will make it most usable to all types of users. This has been my vision for land records for quite some time. Our role is to put the basic record of land ownership - the index and document images - out their on the web, freely available to anyone who wants to use it. Everyone from the most experienced real estate lawyer to a first-time home owner want-to-be has equal access to this information. And “creative individuals” also have access. These are the kind of people who constructed sites such as www.zillow.com which takes our data and mixes it with other information from assessors and real estate agents. Some believe that we should be retaining tighter control of this information and charging for access to it. I believe that the initial recording fee for our documents (which may be the highest in the nation) is sufficient to pay not only for recording the document but also for maintaining it electronically in perpetuity, but that’s a fight that still over the horizon, so I won’t worry about it for now.
[powered by WordPress.]
|« Dec||Feb »|
21 queries. 0.634 seconds