Lowell Deeds

We often receive calls from folks asking us to take the name of a deceased spouse “off the deed.” In an effort to better inform people in this situation, we have prepared an information sheet that explains what actually happens. Here’s the text:

In Massachusetts, married couples almost always own their home as “tenants by the entirety” which is a type of joint ownership that carries with it a right of survivorship. As tenants by the entirety, each spouse owns the entire property subject only to the other spouse’s interest in the house. On the death of one spouse, the entire ownership remains in the survivor and the interest of the deceased spouse disappears.

To show this change in ownership in the records at the registry of deeds, the surviving spouse should record a death certificate of the deceased spouse. The registry will create a link between the deed showing the tenancy by the entirety and the death certificate. The two documents taken together show that ownership of the property resides solely with the surviving spouse.

The registry requires an original death certificate (i.e., not a photocopy) and the filing fee is $75 payable in cash or check (made payable to “Registry of Deeds”). The death certificate can be recorded by bringing it to the registry or by mailing it to the above address (if mailing, please include a self-addressed, stamped envelope so we can return the original to you).

We often receive calls from individuals who have just lost a spouse telling us that their insurer, bank or town assessor insists that the decedent’s name be “taken off the deed.” Such a request is often based on a misunderstanding of Massachusetts property law since nothing is ever taken “off a deed” and, in the case of spouses owning property as a tenants by the entirety, the surviving spouse automatically becomes the sole owner of the property so there is no need to create a new deed.

A lawyer recently asked about the proper wording on a deed that was conveying a house to a same sex married couple who wanted to hold as tenants by the entirety. According to a memo from the Land Court dated May 6, 2004, the proper form would be “A and B, as tenants by the entirety” without any mention of “husband and wife” or “a married couple.” There’s no problem if that language is included, but it is not required and its absence is of no consequence. With same sex marriage having been legal in Massachusetts since early 2004, property ownership by same sex spouses is becoming more and more common.

The current issue of MassBenchmarks, a quarterly journal published by the University of Massachusetts’ Donahue Institute’s Economic and Public Policy Research Unit in cooperation with the Federal Reserve Bank of Boston, contains an article by UMass Lowell professors Dave Turcotte and Bob Forrant and by graduate students John Fraser and Shuwen Liu, that analyzes the foreclosure crisis in the cities and towns of the Merrimack Valley. The article is packed with interesting data and astute commentary and is worth a read. (In full disclosure, I provided some data for the article and a short side-bar piece that accompanies it).

Our electronic recording terminal has been buzzing with activity during the past few days, mostly due to hundreds of assignments that read as follows:

Citi Residential Lending Inc, as Attorney-in-Fact for Ameriquest Mortgage Company does hereby assign the described mortgage together with the note described therein to Deutsche Bank National Trust Company, as Trustee for Ameriquest Mortgage Securities Inc Asset-Backed Pass-Through Certificates, Series 2005-R6, under the pooling and servicing agreement dated July 1, 2005. Said mortgage was executed on July 1, 2005 by Joe Homeowner and is recorded in the Middlesex North District Registry of Deeds in Book 30125, Page 15.

Asset-Backed Pass-Through Certificate? The way I understand it, a mortgage banker pools together say $10 million in home mortgages and generates “pass-through certificates” in $10,000 denominations that represent the entire value of that mortgage pool. Investors then by these certificates and the mortgage banker (or a servicing company) receives the monthly mortgage payments from homeowners and passes the money through to the investors, keeping a percentage (44/100 of 1% seems a standard amount) for the effort.

As most of us who were recording all of these mortgages knew full well, the chances of them being paid by the borrowers was – remote, shall we say. It seems that the investors who bought these “pass-through certificates” didn’t have the benefit of our opinions. Many investors are now claiming to have been misled. A class action suit now pending in the US District Court for the Eastern District of New York makes the following allegations:

Investors purchased the Certificates based upon three primary factors: return (in the form of interest payments), timing of principal and interest payments, and safety (risk of default of the underlying mortgage loan assets). The Registration Statement included false statements and/or omissions about: (i) the underwriting standards purportedly used in connection with the origination of the underlying mortgage loans; (ii) the maximum loan-to-value ratios used to qualify borrowers; (iii) the appraisals of properties underlying the mortgage loans; and (iv) the debt-to-income ratios permitted on the loans.

As a result, the Certificates sold to plaintiff and the Class were secured by assets that had a much greater risk profile than represented in the Registration Statement. In this way, defendants were able to obtain superior ratings on the tranches or classes of Certificates, when in fact these tranches or classes were not equivalent to other investments with the same credit ratings.

My sense is that all of the assignments we’ve recently received are somehow related to all of this, particularly with all the talk of bank bailouts or takeovers.

Unfortunately, this morning’s burst was just that…a morning burst.

I am going to make this a short blog post…I mention the length because it actually provides the meaning. Right now business at the Middlesex North Registry is so brisk I can only spare a few minutes to write. It started first thing this morning…We received 70 electronic assignments and the Recording Counter is going non-stop…of course, most of the documents are mortgages. Sorry…but not time for a pitcure…or spell check!

Are you trying to grasp the implications of the Homeowner Affordability and Stability Plan that was just announced by President Obama earlier this week? So are we. Like most things that involve real estate financing, it’s quite complicated and additional details won’t be forthcoming until March 4. In the meantime, one of the best sources of information I’ve found is the White House website. Go there to read an extensive set of questions and answers and to find a fact sheet summarizing how it might work for individual homeowners. In the coming days, we’ll try to digest the plan and determine its implications for real estate in the Northern District of Middlesex County.

The number of mortgages recorded in Middlesex North during the first six weeks of 2009 was up 5% from the same time last year. It is also becoming clear that the identity of the lenders making these loans has changed dramatically. We’ve only had a chance to look at lenders making loans on Lowell properties during the first six weeks of 2009, but what’s most apparent is that many of the national lenders such as Wells Fargo and Deutsche Bank, institutions that more than any others fueled the recent real estate bubble, have all but disappeared. Here’s a list of the top mortgage lenders for Lowell properties thus far in 2009:

Bank of America - 16
Countrywide - 14
Enterprise Bank - 13
Salem Five - 12
First Eastern Mortgage - 9
Jeanne d’Arc Credit Union - 8
Lowell Five Cent Savings - 8
Sovereign Bank - 8

It seems that one consequence of the dramatic reshuffling of the real estate world is that local banks are returning to their former spots as some of the most active lenders in the community.

Finally, some good news….according to the Mortgage Bankers Association mortgage applications (and I quote) “soared” over the last couple of weeks. Of course, the surge is being fueled by refinancing. How much of a surge? Well, check out this quote from Reuters… “A drop in mortgage rates to a record low 4.89 percent in early January pushed MBA’s (Mortgage Bankers Association) applications index to 1,324.8, the highest reading since July 2003”.
July 2003! Are you kidding? I’ll tell you about July 2003!
In July 2003 the Middlesex North Registry of Deeds recorded 15,337 documents for the month, 4,877 of which were mortgages. That’s just a bunch of numbers right. OK, here’s a means of comparison…Last July (2008) we recorded a total of 4,834 (as compared to 15,337 in 2003) of which (are you ready?) 926 were mortgage, that’s compared to 4,877 in 2003. Hopefully, this increase reflects a long lasting trend and not just a short phase, if so things maybe getting very busy around here in the next few weeks. I’ve got my fingers crossed.

My assertion in a recent post that the Bar had shown little concern about the holding of the National Lumber case elicited a helpful phone call today. (Feedback is good – it lets us know you’re reading this stuff). It turns out that REBA (Real Estate Bar of Association of Massachusetts) has also filed a proposed amendment (no bill number yet) that addresses the “order of recording” question raised by National Lumber. Here’s the amendment:

Chapter 36 of the General Laws is hereby amended by striking out section 14 and
inserting in place thereof the following section:

Section 14. Each register shall keep a record, in book or electronic form, into which the
register shall enter recording information for all instruments accepted for record, in the
order in which they are received. Prior to accepting an instrument for record, the register
shall approve the instrument by determining that it meets minimum statutory recording
requirements. Rejected instruments shall be promptly returned. Upon acceptance of an
instrument, the following information shall be entered into the record: the day, hour and
minute when the register assigns an instrument number, and/or book and page number as
the case may be; the instrument number and/or book and page number so assigned; the
names of the grantors and grantees in the instrument; the city or town in which the land
lies; the name of the person to whom the original instrument will be returned after being
recorded, and the fees received therefor.

No instrument shall be considered to have been recorded, until the register approves the
instrument for recording and assigns to the instrument an instrument number, and/or book
and page number as the case may be. In order to provide for the orderly recording of
instruments that are delivered or otherwise transmitted to a registry district, including by
mail or electronic means, the secretary of the commonwealth may, by rule, regulation or
guideline, establish a uniform practice for determining the order of receipt by the register.

The record maintained by the register shall be open to public inspection during registry
business hours. Any change or correction to said record shall be documented in such a
manner that the fact that there has been a correction, and the nature and date of the
correction, shall become part of the record.

Furthermore, a closer reading of the National Lumber decision reveals footnote 10 which states:

(10) Although we need go no further for the purpose of our decision, we observe that the underlying objective of the recording aspect of the statute was not thwarted in the instant circumstances. See Golden v. General Builders Supply LLC, 441 Mass. 652, 659-60 (2004) (”The statute is intended to ensure ‘that an enforcement action may readily be identified through routine title searching procedures,’ . . . and it accomplishes that objective by requiring that an attested copy of the enforcement complaint be recorded within thirty days of its filing with the court”). There was no suggestion of any third party being prejudiced or misled by lack of notice during the fourteen days that the complaint did not appear on the registry’s books. Compare L.L. Brown Paper Co., 330 Mass. at 502. Further, the property owners never disputed that they had timely notice of National’s lien, having been served with the complaint on December 4, 2002.

National Lumber, you recall, held that a mechanics lien was granted priority based on the time it was received by the registry of deeds, not the time it was actually entered into the registry’s recording system. Footnote 10 seems to imply that if an innocent third party had changed its position in reliance on the contents of the registry’s index as it appeared to the public, then the outcome would have been different than that reached based on the unique facts of this case.

Now that the big Federal stimulus package is through Congress (all that’s apparently needed is a formal vote today with the President expected to sign the bill on Monday), the next object of the Federal government’s attention should be home mortgages which are what precipitated the global financial collapse in the first place. According to a Reuters story on www.boston.com, the proposal now taking shape would establish standards for loan modification based on the percentage of gross income being paid monthly on a mortgage. Currently the guideline is 38% (if you’re paying more than that, you’re eligible for assistance). The new plan would reduce that percentage. Also, modifying the loan would not be optional by the lender. If the borrower was within the “qualifies for help” zone, a new appraisal of the property would be conducted and the loan would be modified to reflect the current fair market value of the property. Sounds like a good time to be an appraiser.

Happy Birthday to Abraham Lincoln and Charles Darwin. Amazingly, these two giants in history not only share the same birthday, they were born on the exact same day - February 12, 1809 - making today the 200th anniversary of their births.

On a related note, remember that the registry of deeds will be closed this coming Monday, February 16, 2009, in recognition of President’s Day.

Please indulge me today…I am feeling a little cranky so I thought I would tell you about a few “devices” I own that drive me crazy (these are not in any particular order).

First is My Toaster: Yes, I like toast, but I have never owned a toaster that works right. I currently own a fourer (four slots).Now, this is how it works or rather doesn’t work…I put bread in it and I get bread back, not toast. Why? you ask. Well, I put the bread in the slots, press it down and it immediately pops up…I press it down again and again it immediately pops up. Yeah, bread in and bread out. Once, I actually had to hold down the levelers with masking tape so I could make a BLT.

Second is My iPod: I know you are shocked by the iPod being on my “it drives me crazy list”. But truthfully, no one really “owns” an iPod. Apple just lets you use one. The fact is I love my iPod, but I hate Apple’s arrogant control of it. You’re right, there is a story behind these feelings. Recently I lost 1,100 songs I had stored in my iTunes library (forget the reason, it is not important). No problem I thought, I have all 1,100 backed up on my iPod. I’ll just upload them, I thought. I called Apple for assistance. I explained the situation and asked for help uploading from my iPod back into iTunes.
“Sure thing”, the friendly tech said …”but you can only upload songs from your iPod that you bought on iTunes”.
“Are your kidding. This thing is nothing but an external memory device. Why can’t I take MY music off of it?” I said.
“Apple doesn’t allow that” he told me.
I knew I should have purchased a Zune.

Next is my Can Opener: I hate that thing. The “Can” itself was no doubt one of mankinds greatest invention. The man that invented “The Can” was a genius…but I ask, after he invented “The Can”, why didn’t he finish the job and invent “The Can Opener”? Instead he left that important task to obvious inferiors…I have owned electric can openers, sure grip can openers, battery operated can openers, the old fashion jack style can openers… you name it. And NONE of them work as designed.

Finally is The Electric Tooth Brush (notice I didn’t say My): Let me say up front this tooth brush is a subject of disagreement between my wife and I. She loves the thing, I hate it.
About a week after my wife purchased the electric tooth brush she asked me…
“Why don’t you use the electric tooth brush?”
“I don’t like it?” I answered.
“Why?” she persisted.
“If you must know” I said “because it has a battery in it”.
“So what’s wrong with that”?
“I am not comfortable putting something with a battery in my mouth”.
“Are you for real?”, she said.
“The next thing you know, I’ll be walking around with a flashlight in my mouth,” I shot back.

During 2008, there were 71 deeds and 4 foreclosure deeds with consideration of more than $1 million recorded at the Middlesex North Registry of Deeds. Here’s how those sales were split among the ten towns in our district:

Billerica - 10
Carlisle - 17
Chelmsford - 5
Dracut - 2
Dunstable - 0
Lowell - 13
Tewksbury - 9
Tyngsborough - 1
Westford - 12
Wilmington - 4

The foreclosure deeds were for properites in Lowell, Westford, Wilmington and Tyngsborough. Check back later this week when I provide details about the top five sales of 2008.

Twitter, Twitter, Twitter…Why do I keep blogging about Twitter you wonder. I’ll tell you why. I think Twitter represents a revolution in Internet communication… Do I need to explain Twitter again. OK, here goes… Twitter is a micro-blogging software that allows you to communicate updates to “followers” using no more than 140 characters. Tweets (as they are called) are succinct and timely…and you can easily tweet on your cell phone. Tweets vary greatly in content, from the mundane to the amazing. For instance last month’s Miracle Landing of the US Air Jet was first report by someone using Twitter. But Twitter has a major limitation…In order to see a particular person’s Tweets you must be a “follower” of that person. In other words if you weren’t a Twitter follower of the first person that reported the Hudson Landing you didn’t get the immediate news. The solution to this is simple. Twitter needs to be searchable and retrievable through an RSS Feed. Can you just image the power of being able to search millions of immediate Tweets from all over the world with a click. Ok, so why hasn’t Google or Yahoo developed a Twitter search engine? Here is my speculation…Google and Yahoo want to purchase Twitter. If either of these giants makes the microblog searchable, the prices goes up. I think one of the big boys will purchase Twitter first then developed a search engine for it…then will be a real communication revolution.