Wednesday, January 8, 2025

Registry of Deeds Retrospective

 Richard P. Howe Jr.

Tuesday, December 31, 2024, was my final day as the register of deeds for the Northern Middlesex District. Most people know that


the registry of deeds keeps landownership records but details of how the office operates are only vaguely understood. While our system of land ownership developed in medieval England, the method of keeping records of that ownership emerged in 16th century Massachusetts. Although the technology used to operate this system has changed, the system in use today is the same as the one used in 1640.

Here’s how that system works: (1) all recorded documents like deeds and mortgages are reproduced in their entirety in the registry records; (2) the registry creates an index of the names in these documents to assist future landowners to find ones relevant to them; (3) the registry makes these records available to the public for research. Because this system has been in place for so long and continues to work satisfactorily, it’s unlikely to change in the future.

With that as background, here are some thoughts on my 30 years as register of deeds. In the spring of 1994, I was practicing law here in Lowell with my father, Richard P. Howe (who passed away in 2015) and my sister, Martha Howe (who remains at the Howe Law Office today). I did mostly real estate and criminal defense but after eight years of that I was ready for a change. One afternoon while walking back to our Kearney Square office from the Superior Courthouse, I glanced at a Lowell Sun newspaper vending box and saw the headline, "Register of Deeds to retire." Edward Early, who had held the office since 1977, was not running for reelection so it would be an open seat in that fall's state election. 

I had never aspired to be register of deeds, but the job seemed like it would be a good fit since three things I was passionate about - the law, history, and technology - were central to the position. I jumped into the race. So did eleven others. There were nine of us in the Democratic Primary: Walter J. “Buddy” Flynn; me; Patricia Kirwin Kielty; Edward J. Kennedy; Dennis E. McHugh; Dennis Scannell; David A. Shaughnessy; Frederick L. Simon; and Karin Theodoros. In addition, John Noonan, a land surveyor from Billerica, was running as a Republican; and Patrick O'Connor, an occasional city council candidate from Lowell, was running as an Independent. It was a vigorous campaign that grabbed the attention of the Greater Lowell political world. When the votes were cast in the September primary, I was the winner by a slim margin which grew slightly after a district-wide recount. Taking nothing for granted, I continued an all-out campaign until the November state election which I won by a more comfortable margin. I took office on January 5, 1995.

Just six weeks earlier, the registry had installed its first document scanner. The age of digital images had arrived. Fittingly, the system was by Lowell-based Wang Labs. I embraced the technology and immediately sought ways to digitize existing records and add them to the system along with newly recorded documents.

Although it's hard to comprehend now, our biggest obstacle was a lack of electronic storage space. The Wang system utilized something called an "optical disk jukebox" which worked just like a music jukebox you would encounter in a diner or bar except this jukebox held double-sided CDs rather than vinyl records. Each of these disks held 1 gigabyte of digital images and the jukebox held 40 of them. A customer wishing to view an image on one of the registry's "dumb" terminals (i.e., a single purpose monitor rather than a personal computer) would call for the image and a mechanical arm in the jukebox would retrieve the relevant disk and insert it into the disk reader where the requested image would be transmitted to the customer's terminal. With real estate booming and with every mortgage having 20 or more pages, our 40 gigabytes of storage filled rapidly. It was time for a second jukebox. The low bid for 40 gigabytes of storage in 1996 was $40,000 which, considering that today you can buy triple that amount for less than $10, illustrates how rapidly technology has changed.

Next up was the Y2K crisis which many today believe was overblown hype, however, that attitude misconstrues what happened and discounts the amount of work that was required to avoid a disastrous result. Here's a recap of what Y2K was about. Because electronic storage was at a premium in the early days of computing, code writers sought to conserve space by writing dates in computer code with six digits rather than eight, so November 20, 1909, would be encoded as 11-20-09 rather than 11-20-1909. This worked fine as long as you were in the 20th century, but with the arrival of "Year 2000" aka, Y2K, would 11-20-09 mean November 20, 1909, or November 20, 2009? The fear was that the shortcut date code would cause computers to freeze up and since more and more of everyday life was dependent on computers, a crisis would ensue. Fortunately, lawmakers took this threat seriously and appropriated ample funds for Y2K preparation. 

At the registry of deeds, I was very aggressive about accessing Y2K funds. Our Wang software was written with six-digit dates so fixing that was a big and expensive job, but we also used Y2K funding to acquire all kinds of cutting-edge computer equipment which helped catapult the registry forward. This allowed me to digitize all the registry’s recorded documents going back to the 1640s and to make those document images fully accessible on the registry's website at no charge to our customers. This was a pivotal moment because it meant registry users no longer had to physically come to the registry to research land ownership. If they had a computer and an internet connection, they could do it all from their home or office, 24 hours per day, 7 days per week. 

Besides making registry records more accessible, this wholesale digitalization made registry users more comfortable with working online. This paid dividends in 2005 when we rolled out electronic document recording. That technology allowed a lawyer to create a secure internet connection to the registry and then scan original documents like deeds and mortgages back at the law office and securely transmit them electronically to the registry of deeds where they would be recorded the moment they were received. Recording fees were paid by an electronic transfer of funds from the lawyer's bank to the registry's account. This was rapidly adopted by lawyers and lenders in the real estate field and before long, more than 80 percent of the documents being recorded arrived at the registry electronically. This was a huge efficiency for the registry since typing and scanning was done by the submitter instead of the registry staff, there were no checks to handle, and no original documents to mail back to customers. 

This widespread adoption of remote research and recording helped ease the transition to the registry's new space in early 2020 when the office moved from its home of 165 years at the Middlesex Superior Courthouse on Gorham Street to the new Lowell Justice Center on Jackson Street. Because the registry of deeds is part of the Secretary of State's office and not the Trial Court, the initial plans for the Justice Center did not include the registry of deeds. Because we were squeezed in later in the planning process, the amount of space the registry was allocated dropped from 15,000 square feet in the old space to just 5,000 square feet in the new. Because our online research and recording capabilities were already used extensively, it gave us the flexibility to reduce the amount of space available to the public.

I expected this new office configuration to generate pushback from traditionalist customers who were more comfortable doing everything in person than online, but that friction never materialized due to an unexpected circumstance - the Covid-19 pandemic. The physical move of registry operations from Gorham Street to the Justice Center happened on Saturday, March 21, 2020, in the earliest days of the lockdown. For the next 15 months, no one was able to come to the registry in person due to the pandemic. Through that same period, real estate was booming in an almost irrational way, so even the traditionalists learned to do everything remotely. Once the building reopened to the public, anytime someone asked, “why can’t I do my work in the registry space like we used to?” I would reply, “how have you been doing it for the past 15 months when you weren’t able to come here?” which usually ended the conversation. (While there’s nothing inherently wrong with someone coming to the office in person, the reality is that it is much more efficient and productive both for the customer and for registry staff to do things by phone, email, or online.)

One thing I regret being unable to accomplish during my tenure was fully integrating registry of deeds records into an online mapping system. As far back as 2000, I advocated greater use of Geographic Information System (GIS) software - basically, online mapping - to retrieve and display land ownership records. Add to this the tax assessing and zoning functions of municipal government, and soon you would have one stop shopping for land-related information. Early on, this was a novel concept but today with everyone dependent on their vehicle's GPS system for wayfinding, digital mapping technology is widely embraced. I suspect the "silo" effect of separate agencies offering their records independently masks the benefits that would flow from integrating them in a map-based system. But that will be a task for someone else to accomplish.

Another registry task I hope someone will take on is to make greater use of artificial intelligence. Whether it is transcribing historic records written in cursive into searchable text; providing 24/7 customer service on the registry website; performing quality control of documents submitted for recording; or just doing regular office tasks more efficiently, I believe the ability of AI to help with future registry operations is nearly unlimited. I do think that real estate law (and much else) can't be boiled down solely to a set of yes/no questions, so human judgement will always be needed. But as the saying goes, "You won't be replaced by AI but you might be replaced by someone who knows how to use AI" so I think the time is right for everyone to start experimenting with the capabilities of this new technology.  

Finally, I want to thank the voters of the Northern Middlesex District (which includes Billerica, Carlisle, Chelmsford, Dracut, Dunstable, Lowell, Tewksbury, Tyngsborough, Westford, and Wilmington) for electing me to five consecutive six-year terms as register of deeds. It has been my pleasure and privilege to serve you over the past 30 years. 

As for what I will do with my time now that I don’t have to go to the registry of deeds office every day, I plan to spend more time researching and writing about Lowell history which is a fascinating and limitless topic. I will keep writing this weekly newsletter on Lowell politics which is, after all, a record of history as it happens. Some related projects are also in the planning stages, so I’ll have more to share in the coming weeks.

This article was originally post at :

https://www.linkedin.com/pulse/registry-deeds-retrospective-richard-howe-dh0ve/

Tuesday, December 17, 2024

Zombie Mortgages

 

Rhonda L Duddy

The term “zombie mortgage” originated from the aftermath of the financial crisis in 2008 when there was an increase in residential mortgage loans that defaulted.  In a typical scenario, the mortgage servicer would start the foreclosure process, but then stop all communication with the homeowner and not follow up because the servicer didn’t believe they would be able to recoup their investment, so it wasn’t worth their effort.  Because of the lack of communication, and other likely financial pressures, some homeowners may not have prioritized payment obligations or thought that their mortgage was forgiven or rolled in with a first mortgage during a refinance or other loan modification.  Unfortunately, that was not the case and that debt along with the encumbrance continued to exist.  After remaining silent for years, the mortgages then came back from the dead, so to speak, when the mortgage servicer resumed collection efforts or foreclosure processes were initiated and that is why these resurrected mortgages are sometimes referred to as “zombie mortgages.”   

Although the term “zombie mortgage” has been around for years, you may have been hearing them mentioned more frequently lately.  That could be due to the $10 million dollar settlement that was reached last October between the Massachusetts Attorney General and Franklin Credit Management Corporation (Franklin Credit).  In addition to the settled Massachusetts case, articles have recently been published that discuss the reason for the increased interest in zombie mortgages.  For instance, a recent New York Times article stated that the latest focus on zombie mortgages is due to the rise in home prices.  The article stated that the median home sale price has hit another record high, but mortgage rates have declined.  Since a rise in property values increases equity, that increase could put a mortgage holder in a good financial position. Also, a recent NPR investigation analyzed foreclosure data in several states and found that in the past two years there were at least 10,000 second mortgages in New York alone whereupon foreclosure activity had been initiated for mortgages that were originated between 2004 to 2008.  Even the CFPB has defined the term in its consumer information page.  (https://www.consumerfinance.gov/ask-cfpb/what-is-a-zombie-second-mortgage-en-2133/) Clearly, some mortgage holders believe now is the time to take action in order to recoup their investments.   

Massachusetts Attorney General Andrea Campbell recently released a statement that the settlement with Franklin Credit was the first of its kind in the Commonwealth.  According to the statement, the settlement resolves allegations that the company violated Massachusetts consumer protection laws by improperly attempting to collect on debts in its portfolio of primarily second mortgages after failing to communicate with borrowers as well as failing to comply with critical foreclosure-prevention measures in accordance with MGL c. 244, §35B. Section 35B prohibits a lender from publishing a notice of foreclosure sale with respect to “certain mortgage loans” without first having taken reasonable steps and made a good faith effort to avoid foreclosure.  The Attorney General claims that Franklin Credit severely delayed communicating with borrowers, including delaying sending required 35B notices, which prevented borrowers from obtaining assistance until their unpaid balance was too large to allow a successful modification of the loan. The Attorney General further alleged that when Franklin Credit did send the required 35B notices, it failed to take required steps to respond to and assist borrowers, and in some instances unlawfully charged up-front payments as a prerequisite to entering a modification, further impeding borrowers’ ability to cure or modify their mortgages.

Under the settlement agreement, Franklin Credit will cease collecting and attempting to collect the debts of its entire Massachusetts mortgage loan portfolio. The company also will not transfer or sell any of these loans to another entity, effectively relieving the burden of over $10 million in debt for hundreds of Massachusetts borrowers. In addition, Franklin Credit will make a monetary payment of $300,000 to the Commonwealth and change its business practices to comply with state laws if it seeks to service any future mortgages in Massachusetts.

Franklin Credit Management denied all of the allegations and stated that they are pleased to have resolved the matter and believe the settlement is in the best interests of the company.  To read Attorney General’s press release on the settlement, follow this link:  https://www.mass.gov/news/in-precedent-setting-settlement-ag-campbell-protects-homeowners-from-zombie-second-mortgages

Rhonda Duddy is Massachusetts and New Hampshire Underwriting Counsel for Stewart Title Guaranty Company.  She is also a member of REBA’s Title Insurance and National Affairs Section.  Rhonda can be reached via email at rduddy@stewart.com

 




Wednesday, November 27, 2024

Legislature Enacts Another Permit Extension

Nathaniel Stevens


Just prior to the Thanksgiving holiday, Governor Healey signed the “Act relative to strengthening Massachusetts’ economic leadership.” Also known as the Mass Leads


Act, this comprehensive economic development bill includes provisions to again extend the life of many types of land use permits issued by municipal, regional, and state government.  

 

As a result of the real estate downturn in 2008, the state enacted very similar permit extension acts in 2010 and then again in 2012.  

 

Like the first two, this third act automatically extends by two years many, but not all, “approvals” concerning real estate use and development. As earlier, it extends such permits by operation of law, requiring no action by the permit holder or issuing authority.  For that reason, there is no need for a document officially memorializing the extension. Also as in prior years, this act could revive permits that have expired.

 

​Specifically, Section 280 of Chapter 238 of the Acts of 2024 provides that “an approval in effect or existence” during the “tolling period” of January 1, 2023 to January 1, 2025, inclusive, shall be extended for a period of two years from its expiration date. Note that the granting of the approval does not have to occur during that period, rather the approval only has to be in effect during the tolling period, even for just one day.

 

Thus, expired permits might be revived.  For example, a permit that had a stated expiration date of February 1, 2023 is now resurrected by this law by being extended, retroactively, two years.  It now expires February 1, 2025.

 

Also, the two-year extension is automatic. There is no need for formalizing or memorializing the extra two years.  That is, the holder of an approval, or permit, is not required to apply for an extension or confirm it.   

 

An “approval” is broadly defined as any permit, certificate, order, excluding enforcement orders, license, certification, determination, exemption, variance, waiver, building permit . . . concerning the use or development of real property from municipal, regional or state governmental entities under specific laws, including, but not limited to those pertaining to wetlands protection, waterways, subdivision, and zoning and the relatively new Starter Home Law (Chapter 40Y).  As with the two prior extensions, comprehensive permits granted under Chapter 40B are not extended.  Unlike before, certain approvals granted under the state’s hazardous waste clean-up law, Chapter 21E, are included in the definition.

 

Enforcement orders are specifically exempt and thus not extended.  Federal permits, “40B” comprehensive permits, and certain hunting, fishing and aquaculture licenses issued by the state also are not extended.  These exclusions are consistent with the exclusions in the first two extension acts.

 

Unlike the first two extension acts, though, this one explicitly provides that any approval in effect during the tolling period shall be governed by the applicable by-law or ordinance in effect at the time the approval was granted, unless the holder of the approval elects to waive this protection.  Interestingly, there is no similar provision for approvals by regional or state entities. 

 

This third Permit Extension Act means that one should review each permit, determine whether it was in effect during at any point between January 1, 2023 and January 1, 2025, and, if so, determine its expiration date, and then add two years to calculate the new expiration date.    Some careful permit holders in 2010 and 2012, however, wanted to have a confirmatory vote, email, or letter acknowledging that their permit qualified for the extension and stating the new expiration.

 

In response, some boards, agencies and officials like conservation commissions or their agents issued generic letters acknowledging the existence of a Permit Extension Act and stating its provisions.  Others were willing upon request to issue a specific confirmation of a permit’s new expiration.  A few were willing to issue a corrected permit with new expiration so it would be self-contained and could be recorded if desired.

 

Land use permit holders and their legal counsel will want to check which of their real estate use and development permits are now valid two years longer than they thought.  Municipal, regional, and state permitting entities will dust off what they did in 2010 and 2012 to educate and assist permit holders and the public, in addition to noting the new expirations in their official records.

 

Nathaniel Stevens is a member of REBA’s Environmental and Renewable Energy Law Section and partner in McGregor Legere & Stevens PC in Boston.  He handles a broad range of environmental and land use matters, from administrative law to litigation. He has helped a diversity of clients with environmental issues including permitting, permit appeals, development, contamination, transactions, conservation, real estate restrictions, water supply, water pollution, subdivision control, tidelands licensing, Boston and state zoning, coastal and inland wetlands, stormwater, air pollution, and energy facility siting.  His email contact is NStevens@mcgregorlaw.com.

Wednesday, November 20, 2024

What Homeowners and their Lawyers Need to Know about the New Accessory Dwelling Unit Law

 Caroline E. Smith

Massachusetts recently enacted a new housing statute that makes it easier for homeowners to create accessory dwelling units (ADUs) on


their residential properties. These commonly were called “in-law apartments” but the new law allows much more.

The new statute is known as the Affordable Homes Act. The Act is Chapter 150 of the Acts of 2024. The ADU provisions are part of the state’s broader efforts to address its housing affordability crisis and increase housing options, particularly in high-demand areas.

Essentially ADUs are now legal almost everywhere “as of right.” If you’re a homeowner considering adding an ADU or just wondering how this new law affects you, here’s a breakdown of the key features giving you new legal rights and how to proceed.

What is an Accessory Dwelling Unit?

In general, an ADU is a small, self-contained living space located on the same lot as a primary residence. It can take various forms, such as a basement apartment, garage conversion, house expansion, or detached house.

ADUs typically have their own kitchen, bathroom, and separate entrance. Now in Massachusetts they offer flexibility for homeowners to rent out the dwelling unit or use it for family members, such as aging parents or adult children.


Key Provisions of the New ADU Law

The new ADU provisions are Sections 7 and 8 of the Act. Section 7 amends the definition of accessory dwelling unit in the Massachusetts Zoning Act (M.G.L. c. 40A) and is effective now. Section 8 amends Section 3 of the Massachusetts Zoning Act and takes effect on February 2, 2025. These amendments require municipalities to allow ADUs as of right in most residential zoning districts, with some important limitations. Be sure to pay attention to this “small print.” Do not make any assumptions.

1. “By right” approval: ADUs allowed “by right” means homeowners no longer need special permits or zoning variances to build them (subject to some local regulations). This streamlines the process and makes it more predictable.

2. Size limitations: The ADU cannot exceed 900 square feet or 50% of the size of the primary dwelling, whichever is larger. This ensures that the ADU remains a secondary, subordinate structure on the property.

3. Reasonable Restrictions: ADUs are subject to reasonable restrictions such as compliance with Title 5 (septic systems), site plan review, dimensional setbacks, bulk and height limits, and restrictions on usage as a short-term rental.

4. No owner occupancy requirement: Neither the homeowner’s primary residence nor the ADU must be owner-occupied. This means the main building and/or the ADU can be occupied by anyone.

5. No off-street parking requirements: In many cases, the law eliminates the need for additional off-street parking spaces for ADUs, particularly if the property is near public transit or in a densely developed area.

6. Flexibility in ADU types: Homeowners can convert existing spaces, like basements or garages, into ADUs, expand existing houses, or construct entirely new structures, providing more options for creating additional housing.

7. Exemptions for certain areas: Some municipalities, particularly in rural or less densely populated areas, may be exempt from certain provisions of the law, though most communities are required to adopt ADU-friendly zoning codes.


Why is the New ADU Law Important for Homeowners?

1. More housing options: ADUs help alleviate the state’s housing shortage by increasing the number of affordable housing options available, especially in suburban or urban areas with high demand.

2. Rental income potential: By building an ADU, a homeowner can generate rental income, which can help offset mortgage payments or provide additional financial security.

3. Flexibility for multi-generational living: ADUs are an ideal solution for families needing extra space for aging parents, adult children, or other relatives, offering privacy while maintaining close family connections.

4. Increased property value: Adding an ADU to a property could increase its overall value. Many buyers are attracted to properties with income-generating potential or additional living space.

5. Supporting sustainable growth: The law encourages the efficient use of existing infrastructure and land by allowing homeowners to build ADUs, reducing the need for sprawling new developments.


What should Homeowners Consider?

While the new ADU law offers many advantages, homeowners should be mindful of several factors before starting a project:

1. Local zoning codes: While the state law sets a framework, municipalities have the authority to establish specific regulations regarding ADUs, such as limits on height, setbacks, or the design of the unit. Check with your local zoning bylaw or ordinance or consult a land use or real estate attorney to understand what rules apply to your area.

2. Building codes and permits: Even though ADUs are allowed by right, homeowners will still need to comply with local building codes and obtain necessary permits for construction. This ensures safety and ADUs meeting all required standards.

3.  Health and environmental rules: ADUs must comply with the usual laws about sewerage, water supply, wetlands, storm water, and similar non-zoning requirements.

4. Impact on property taxes: Adding an ADU could impact the property tax assessment. It’s a good idea to consult with a tax professional or local tax assessor to understand how an ADU might affect the real estate tax bill.

5. Financing the project: Constructing or converting an ADU can be a significant investment. Homeowners should plan carefully for the costs and explore financing options, such as home equity loans or construction financing.


Conclusion

Massachusetts’ new ADU law presents a valuable opportunity for homeowners to add housing options to their properties while benefiting from rental income, increased property value, and greater flexibility for family living.

With the “by right” approval process, reduced parking requirements, and flexibility in ADU types, it’s now easier than ever to create an additional dwelling unit on residential property.

However, it’s important to consider the specific zoning regulations in your municipality, comply with building, health, and environmental codes, and carefully plan for the costs of construction.

Consult a land use or real estate attorney, contractor or architect, and others familiar with the law to ensure good advice, careful planning, and proper permitting.  

Understand the ins and outs of the ADU law to determine whether an ADU is right for you, your existing house, and your lot.

 

A member of REBA’s Young Lawyers Section and Environmental Law and Sustainability Section, Caroline Smith is an associate at McGregor, Legere & Stevens PC.