Lowell Deeds

Next Thursday, November 6, 2008, I will be the guest speaker at the Moses Greeley Parker Lecture. The event will begin at 7 p.m. at Lowell’s Pollard Memorial Library (401 Merrimack Street, right next to City Hall). The topic of the discussion will be “The Registry of Deeds and the Foreclosure Crisis.” I plan to review some of the history of this registry and our methods of maintaining land records through the years, but the evening will also include a presentation of up to date statistics on the rate of foreclosures in Greater Lowell and a discussion of the causes of the present crisis.

With the next two months filled with holidays and special events, registry customers often have question about when we are open and when we are not. Our regular hours of operation are from 8:30 a.m. to 4:15 p.m. Except in the case of extreme weather conditions such as a blizzard or a hurricane or an emergency such as a fire or bomb threat, the hours of the registry will not be curtailed. In other words, we don’t close early on Christmas Eve (much to the regret of the handful of employees who must remain to keep the doors open at such times). Looking at the calendar, here are some specific dates that might be of interest:

Friday, October 31 - Halloween - regular hours
Monday, November 3 - first work day after Daylight Savings Ends - regular hours (and enjoy the extra hour of sleep)
Tuesday, November 4 - Election Day - regular hours
Tuesday, November 11 - Veterans Day - closed
Thursday, November 27 - Thanksgiving - closed
Friday, November 28 - day after Thanksgiving - regular hours
Wednesday, December 24 - Christmas Eve - regular hours
Thursday, December 25 - Christmas - closed
Friday, December 26 - day after Christmas - regular hours
Wednesday, December 31 - New Years Eve - regular hours
Thursday, January 1 - New Years Day - closed

I’m mad…I’m not kidding. Let me tell you why. I bought a new HP Laptop Computer about two months ago. Believe me, it wasn’t cheap. And before I bought it, I did my homework. I checked into the latest updates for PC’s. Specifically, I was concerned about the future of Windows Vista. I heard that many people who ran Vista didn’t like it. A rumor even circulated through the techie community that Microsoft was going to dump Vista. Why buy a computer with an operating system that was going defunct shortly, I thought. My fears were alleviated by none other than Microsoft CEO Steve Ballmer himself. During an interview when pressed about discontinuing Vista Ballmer emphatically said “Microsoft is sticking with Vista”. Stupid me, I took the “big short” at his word and bought a new HP laptop with a Vista OS.

You see, I’m mad…I’m not kidding. Why?!…because yesterday Microsoft introduced Windows 7…check out this quote from this morning’s Boston Globe: Microsoft introduced what it said would be a slimmer and more responsive version of its Windows operating system on Tuesday, while unceremoniously dropping the brand name Vista for the new product”.

What!!!…What happened to “we’re sticking with Vista”, Steve? Steve, not only wasn’t this statement true, but Windows 7 had to be under development when you said it…Thanks Steve, thanks alot. Now I own a two month old computer with an out of date operating system because you deceived me and the rest of the public…Well Steve, one thing you are right about, my next computer will not run Vista, but it just might be running a Mac OS, Apple’s Operating System.

Both the Globe and the Herald report that the number of homes being sold is up but the median price they’re being sold for is down to levels last seen in 2003.

I ran a report that finds the median price of all deeds recorded for the ten towns in this registry for each year since 2002. The analysis is based only on deeds where the sales price was greater than $75,000 and less than $1 million. The statistics for 2008 are based on January 1 to October 28. All others are for the complete year:

2002 - 5372 deeds - median price of $250,000
2003 - 5506 deeds - median price of $273,000
2004 - 6234 deeds - median price of $295,000
2005 - 6061 deeds - median price of $307,000
2006 - 4594 deeds - median price of $300,000
2007 - 4296 deeds - median price of $282,500
2008 - 2783 deeds - median price of $256,750 (as of Oct 28, 2008).

Me: Bad news!…Our Kodak 2025 batch scanner is acting up…
Him: What’s wrong with it?
Me: Shhhh, not so loud, I don’t want it to hear you. It is very sensitive.
Him: Should I care?
Me: Should you care? Of course, this machine is a work horse for us. I am not exaggerating, it has scanned millions of pages.
Him: Did you ever think you might be over working it and it needs a rest.
Me: I gave it a rest…For a few months I put it in a kind of semi-retirement…you know, a couple of thousand pages a week, that’s it…I let it kick back and watch the young scanners do the work.
Him: So why not just put it back in “semi retirement”?
Me: I found that the younger, I mean newer scanners just don’t have the same work ethic as old faithful…so in May I took it out of retirement and it responded with a vengeance…
Him: Sounds like Brett Favre…What do you mean, “a vengeance”?
Me: How about a scanner whipping through 30,000 images a week? No jams, no pulling double pages…just clean, clear readable images. Not bad for an old timer, right?
Him: So tell me, what exactly is the problem?
Me: This morning I knew something was wrong…when I walked into the scanning room the atmosphere just wasn’t right. It seemed gloomy…
Him: Well, what was wrong?
Me: The employee using the Kodak 2025 informed me that the old work horse was scanning dark around the edges. My jaw dropped, but I was able to pull myself together and work on it. After about an hour I fixed it.
Him: Maybe it just had the Monday morning blues…
Me: Could be…but I am still very concerned…even though I fixed it, I don’t know how I fixed it.
Him: Well, it is just a scanner, get another one…
Me: Shhhh, I told you keep your voice down. With talk like that, it will be jamming next. Then what will we do? Tell me, what would YOU do without the 2025.
Him: Punt!?!?

With the state budget crisis looming, one way to reduce costs is to shrink the physical footprint of the registry. While that might realize bigger savings for an office that pays rent for space, it’s also a valid strategy for registries that remain in state-owned buildings. Many of the operational decisions that we’ve made through the years have been consistent with, if not directly motivated by, a desire to downsize the registry over the long term. Eliminating the creation of paper record books back in 2001 was a critical step. Our last printed volume was Book 12443 containing documents recorded on December 4, 2001. Today, we’re on Book 22509. That’s a total of 10,066 books that we did not create. If we had created those books, we would require double the amount of shelf space we were using back in 2001. Removing the first 12443 books from circulation was another major step in shrinking the registry’s footprint. Improvements to our website that are already in the testing stage will actually make using the website superior to the in-house search system when doing research. In fact, our in-house search system will probably be taken out of service sometime in 2009, likely to be replaced by in-registry computers that access our data via the internet, making it easier than ever to search all registry holdings without ever setting foot in the building.

There seem to be a flurry of stories in the media about rising foreclosure rates. The Globe had one today. We’ve typically report our foreclosure stats at the end of each month, but with the current upsurge in attention, today I created a chart that shows the number of orders of notice (aka “foreclosure filings”) and foreclosure deeds recorded for the Middlesex North district on a monthly basis beginning in January 2006. The chart may be viewed here.

The end of the summer brought the departure of our college interns. This change required me to make some staffing changes to continue projects the interns were working on through the summer. Specifically, I needed to re-assign staff to keep our record book re-scanning project going. In a unique strategy we are attacking this project on two fronts. One group is moving downward from book 1,300 to book 1 and a second is moving forward from book 6,000-7,500. The older books are much more difficult to scan. But, back to the staff…it is no secret that the number of documents we are recording is significantly down. This includes both Middlesex North and our South Satellite Office. This decrease in business has freed up manpower that can be redistributed to other areas. I have begun to assign some of the recording counter staff to fill the work void created by the loss of the interns. To make sure the public isn’t inconvenienced, the assignments are very flexible and allow a huge amount of employee discretiton.

Last Thursday, the Lowell Plan organized a panel discussion by high-ranking representatives of five local banks to dispel the notion that these institutions were experiencing difficulties due to the ongoing global financial crisis. Representatives of the Lowell Five Cent Savings Bank, Enterprise Bank and Trust Company, Washington Savings Bank, Jeanne d’Arc Credit Union and the Butler Bank all had the same message - prudent lending practices have always remained in effect so their banks are not being dragged down by the weight of bad loans. The figures we see here at the registry corroborate these comments. From January 1, 2007 to September 30, 2008, there were 1589 Orders of Notice (the first step in the foreclosure process) filed at this registry, yet local banks only accounted for 24 of them which is just 1.5%. The one local bank not represented on the panel, the Lowell Cooperative Bank, had the majority with 15, but even that number is not exceptionally high when put in the broader context of the mortgage market meltdown. Here’s the number of Orders of Notice originated by each local bank during the past 20 monts:

Butler Bank - 0
Enterprise Bank and Trust - 1
Jeanne d’Arc Credit Union - 5
Lowell Cooperative Bank - 15
Lowell Five Cent Savings - 3
Washington Savings Bank - 0

Last week Google entered the smart phone market…well kind of . It is more like Google entered the smart phone “software market”. Google calls its new smart phone communication software, Android…and best of all, it is open source, which means it will only get better and better as more and more developers tweak it and add applications. Leave it to Google…the concept of a “universal” phone software is revolutionary. This is how it works…Google is not manufacturing a physical phone, rather it is offering its Android software to any phone company that wants to use it. The first mobile company to take advantage of Google’s generous offer is T –Mobile. T-Mobile’s Google phone goes on sale Wednesday for $179.00. That is $20.00 less that the least expensive iPhone. I have seen it the T-Mobile phone. It reminders me of my Apple iPhone, only not as good in my opinion. It has a touch screen, connects to the Internet, and a 3 megapixel camera…but it is bigger and heavier than the iPhone. David Pogue technology writer for the New York Times did a great video review of the new T-Mobile iPhone killer…check it out. And remember as more cell carriers use Andriod it is going to get better and better.

When it recently became clear that the world had spiraled into the worst financial crisis since the Great Depression, you had to know that all of this fiscal turmoil would have a devastating effect on the state budget (which funds this office). While the specific consequences are far from clear, it is apparent that substantial cuts will be made. In preparing for these cuts, I dug out my notes from November 2001 and the state’s last budget crisis. How we responded at that time might assist us in formulating our response this time.

Several major operational changes were instituted in response to the November 2001 budget cuts:

Record Books: We continued to make books but only for as long as our supply of paper, toner and plastic book covers continued. Surprisingly, the original plan was only to defer production of books until the start of the next fiscal year and the resumption of ordinary funding. Before that occurred, however, we concluded electronic images were the way to go and we never made another record book.

Return Postage: This is when we stopped using our labels, envelopes and postage to mail original documents back to customers. Instead, we gave customers three options: you could have a “pick-up” box at the registry from which to retrieve your documents; you could give us a self-addressed stamped envelope; or you could abandon your document to eventual destruction. This system worked well until August of 2007 when we converted to a full scan-and-return method of operating.

Marginal References: We immediately ceased making marginal references in record books, reasoning that the computerized version would be sufficient. It was.

Curtailment of Fax Service: Back in 2001, many of our customers routinely faxed copies of documents to their clients. While we charged a fee for that service, that (and all other fees we collect) went directly to the state’s general fund and did not come to us. The more long distance phone calls were made for faxes, the higher our phone bill. With no additional money to pay for the increased bill, we eliminated the service. At the time, we knew that all of our document images would soon be freely available on the internet, something that would serve as a reasonable replacement for the fax service.

Back in 2001, these changes allowed us to absorb more than $80,000 in budget cuts. With these already gone, I’m not sure that comparable opportunities to cut still exist. But, we are looking.

Last evening I had the pleasure to speak with a dozen lawyers at the fall meeting of the North Middlesex Bar Association, an organization based in communities west of here such as Groton, Harvard, Ayer and many more. My topic, of course, was the registry of deeds. There were two major areas of discussion: an update on our scan-and-return process for walk-in recordings (that’s where we scan every document as soon as it’s recorded and hand it back to the customer) and an introduction to electronic recording. I say an “introduction” because even though we have been recording documents for some time, most attorneys only have a vague idea of how the system works. One point I made last night that bears repeating is that for all its efficiencies, the scan-and-return system does increase the amount of time it takes us to process each customer (because we still do everything we did before plus we scan the document). With the slow state of the real estate market today, we can easily handle this increased workload. Once volume begins to increase, however, there will be a risk that long lines will re-emerge. That’s why it is critical that we sign up as many attorneys as possible to electronic recording. When things get busy again, if a significant portion of our customers choose to record electronically, waiting time will remain manageable.

A final note from last night, the even was held at the Indian Hill Music Center in Littleton. It is a wonderful facility and has a great selection of upcoming concerts. The complete schedule of events is available on the Center’s website.

Yesterday, we began disposing of close to 10,000 copies of newer recorded books. By “newer” I mean books printed from 2002 to present. Because of space problems these books were never shelved and available to the public only on our computer system. We printed the books in-house with the sole purpose of using them to create microfilm for archival storage. After filming they were placed in a standard bond paper box and stored in the basement of the registry. Rather than just throw them away we have partnered with students and faculty at the Roger’s Middle School in Lowell who will recycle the paper. We estimate there is close to 1.5 million pieces of paper, weighing close to 50,000 lbs. Of course, because of the enormity of the project removing the boxes from the registry will take Roger’s students about six months. Since each storage box weighs approximately 50lbs, we have enlisted the services of community workers to carry them from the basement to the registry’s first floor. All of these books are backed up on microfilm and can be recreated if necessary.

The news is full of stories about the freeze in lending that we’re supposedly in the midst of. Since most mortgages take a minimum of several weeks to be ready to close, we really won’t see the effects of the credit freeze of the past 14 days for several more weeks. But comparing the number of mortgages recorded during various periods of 2008 with 2007 numbers shows that a credit crunch was already underway. For example, in the 3rd quarter (July, August, Sept) of 2007, there were 3752 mortgages recorded at this registry; for the same period this year, there were only 2486, a decline of 34%. The year-to-date (Jan 1 to Oct 14) decline is almost as steep. Up to today in 2007, there were 12858 mortgage recorded; in 2008, that number had dropped by 28% to 9307. Finally, here are the number of mortgages recorded in the first two weeks of October in every year since 2003:

2008 - 319
2007 - 487
2006 - 667
2005 - 927
2004 - 917
2003 - 1271

On the day that the American League Championship Series is about to start, some might argue that the Boston Red Sox have been the most successful major league team of the Twenty-First Century. As evidence, here’s a review of the past five years:

2003 – The “Cowboy Up” season. The Sox came back from a 0-2 deficit to defeat the Oakland A’s in the ALDS. Tied 3 games to 3 against the Yankees in the ALCS, Pedro Martinez had a 5-2 lead after 7 innings when manager Grady Little inexplicably sent his starter back to pitch the 9th. The Yankees tied the game and eventually won it with an Aaron Boone home run off of Tim Wakefield. Here’s the opening day lineup for the Sox:

Johnny Damon – CF
Todd Walker – 2B
Nomar Garciaparra – SS
Manny Ramirez – LF
Kevin Millar – 1B
Shea Hillenbrand – 3B
Jeremy Giambi – DH
Trot Nixon – RF
Jason Varitek – C
Pedro Martinez – P

2004 – The “Idiots” added Curt Schilling to the starting rotation and Keith Foulke as closer. On July 31, they traded Nomar to the Cubs, receiving shortstop Orlando Cabrera and first baseman Doug Mientkiewicz in return. They also picked up speedy reserve outfielder Dave Roberts from the Giants. After winning the Wild Card, the Sox swept the Angels in the ALDS but quickly went down 3-0 to the Yankees. Ahead 4-3 in the ninth inning of game four, Yankee closer Mariano Rivera walked Kevin Millar. Pinch runner Roberts stole second and scored the tying run on a Varitek single. David Ortiz won the game with a 2-run home run in the 12th. The Sox won game five in 14 innings on an Ortiz rbi single. Game six was Schilling’s “Bloody Sock” win that included a 3-run home run by second baseman Mark Bellhorn. In game seven, Derek Lowe threw a 1 hit, 1 run masterpiece. The Sox swept the Cardinals in the World Series. The 2004 Opening Day lineup:

Johnny Damon – CF
Bill Mueller – 3B
Manny Ramirez – LF
David Ortiz – DH
Kevin Millar – 1B
Gabe Kapler – RF
Jason Varitek – C
Mark Bellhorn – 2B
Pokey Reese – SS
Pedro Martinez – P

2005 – The Red Sox made it into the ALDS but were swept in three games by the White Sox. The Opening Day lineup:

Johnny Damon – CF
Edgar Renteria – SS
Manny Ramirez – LF
David Ortiz – DH
Kevin Millar – 1B
Jason Varitek – C
Jay Payton – RF
Bill Mueller – 3B
Mark Bellhorn – 2B
David Wells – P

2006 – This team finished third in the AL East and did not make the playoffs. The Opening Day lineup:

Coco Crisp – CF
Mark Loretta – 2B
David Ortiz – DH
Manny Ramirez – LF
Trot Nixon – RF
Jason Varitek – C
Mike Lowell – 3B
Kevin Youkilis – 1B
Alex Gonzalez – SS
Curt Schilling – P

2007 – The Sox swept the Angels in the ALDS and beat the Indians in the ALCS after falling behind 3 games to 1. They swept the Rockies in the World Series. The Opening Day lineup:

Julio Lugo – SS
Kevin Youkilis – 1B
David Ortiz – DH
Manny Ramirez – LF
J D Drew – RF
Mike Lowell – 3B
Jason Varitek – C
Coco Crisp – CF
Dustin Pedroia – 2B
Curt Schilling – P

2008 – to be continued.