John O’Brien, the Southern Essex District Register of Deeds in Massachusetts, refused yesterday to accept two documents he considered to be signed by “robo-signers”. O’Brien refused two documents signed by Linda Green, a name that appears on nearly 300 other mortgage documents already on file at the Southern Essex District Registry of Deeds and on thousands of other mortgage documents being filed around the country.

O’Brien stated, “My Registry will not be a knowing participant in this fraud against homeowners. From today forward, lenders be on notice, the Southern Essex District Registry of Deeds will not record robo-signed documents.”

Looks like this is policy is catching on quickly. Guilford County, North Carolina Register of Deeds, Jeff Thigpen, joined O’Brien in refusing to accept such documents and issued a press release stating, “The basic question here is whether we as Recorders are going to sit on our hands, in the face of what appears to be clear fraud or are we going to stand up for 400 years of integrity and fair dealing in commerce? John [O'Brien] is on the right side of this question and these are reasonable actions.  If we are ever going to return to basic fundamentals in our financial services system, now has to be time and we have a vital role to play.”

This is great news for borrowers and homeowners. Hopefully, this trend spreads quickly throughout Massachusetts and the country.

You can read more about it here and here.  

Click here for the press release.

Five of the nation’s largest banks may potentially face up to $17 billion in civil lawsuits for improperly foreclosing on homeowners. The state attorneys general notified the banks that they face such an amount if they cannot successfully negotiate a settlement. The banks have proposed a settlement figure of $5 billion to assist homeowners who were improperly foreclosed upon, however this figure has been rejected. 

You can read the full article here.

Earlier this year, the Supreme Judicial Court of Massachusetts handed down a decision in the now famous case of U.S. Bank v. Ibanez, in which the SJC ruled that a foreclosing bank must actually hold the mortgage at the time of the foreclosure. The issue that occurred in the case and in countless others, was that at the time of the foreclosure the assignment paperwork between lenders when the mortgage was sold had not been completed. This meant that the lender was not yet the holder of the mortgage and had no right to foreclose.

Fast forward to this week when the SJC heard oral arguments from attorneys on a related foreclosure case: Bevilacqua v. Rodriguez. In this case, Mr. Bevilacqua purchased property in Haverhill from U.S. Bank, N.A. after U.S. Bank, N.A. foreclosed on the previous owner. Based on the ruling in Ibanez, U.S. Bank, N.A. conducted an invalid foreclosure on the property because it was not the holder of the mortgage at the time they foreclosed.

Because they were not the holder of the mortgage at the time they foreclosed, the Land Court ruled that Bevilacqua did not own title to the property because U.S. Bank, N.A. had nothing to convey and its conveyance to Mr. Bevilacqua is null and void.

What a mess!

Attorneys for Mr. Bevilacqua appealed the decision and the SJC agreed to take the case and heard oral arguments from both sides on Tuesday. The major issue at stake here is whether a buyer can purchase real estate from a bank that lacked the right to foreclose on the previous owner? Based on the Land Court’s ruling, the answer is no and the buyer owns nothing.

The SJC should have a ruling out in the next few months. Either way, it will have huge ramifications on the thousands of foreclosures that have already occurred in Massachusetts and in the future.

Stay tuned…

Condo insurance, also known as HO-6 insurance, covers the interior and personal contents of your condo unit. Depending on the policy, most everything is insured from the inside of the walls of your unit or from the studs in, and all your personal belongings -  this is why you may see on the insurance policy it state from the “studs in”.

But why do you need an HO-6 insurance policy for your condo unit if the condo association already has a master insurance policy that you a pay a percentage for? You need it because the master insurance policy most likely does not cover anything within your unit, but rather only covers areas outside of your unit. For example, the master policy covers the common areas – lobby, hallways, roof, gym and maybe even a pool if your condomonium building owns one. The master insurance policy stops at the outside of each units’ outer walls, our studs. This is where your own personal HO-6 policy would pick up and protect you from any damage that occurs in your unit.

Not only will HO-6 insurance insure damage to your unit, it will also insure you against any damage you cause to another unit. For example, if a pipe bursts in your unit or your dishwasher malfunctions and floods not only your unit, but seeps down into the unit below you, you are most likely responsible for the damage in both units. A good HO-6 insurance policy will cover the cost to repair each unit back to their original state.

Even if the master policy covered the contents within your unit, the deductible is often very high, sometimes as high as $5,000-$10,000 or more. Meanwhile, for an extra $15-25 per month, your insurance agent can setup an HO-6 policy that will cover the contents of your unit.

Like all insurance, be sure to enlist the help of your trusted local insurance agent and make sure he explains each provision of the policy and you understand each one.

The Massachusetts Supreme Judicial Court handed down on Monday its long-awaited ruling in the case of The Real Estate Bar Association for Massachusetts, Inc. (REBA) v. National Real Estate Information Services, Inc. (NREIS). The case revolved around whether NREIS, as an out-of-state non-attorney settlement service provider, was performing certain activities that would constitute the unauthorized practice of law.  

REBA argued that NREIS’s business activites constituted the unauthorized practice of law in Massachusetts because NREIS was performing many of the functions that a licensed real estate attorney would perform in the process of transferring real estate. The SJC concluded that certain functions of conveyancing real estate, such as the preparation of title abstracts, preparation of settlement statements and other mortgage-related forms, recording documents and disbursing funds, and issuing title insurance policies, in and of itself, do not constitute the practice of law. However, “as a matter of common and long-standing practice in the Commonwealth, an attorney must be involved in the closing or settlement of real property conveyances…”

The SJC went on to state that the closing is a critical step in transferring title to property which creates significant legal and real property rights for the buyer. “Because of this, we believe that a lawyer is a necessary participant at the closing to direct the proper transfer of title and consideration and to document the transaction, thereby protecting the private legal interests at stake…In other words, many of the activities that necessarily are included in conducting a closing constitute the practice of law and the person performing them must be an attorney.” 

The SJC went even further and stated that because there are substantive legal rights and interests at stake in a closing, the attorney’s role in the process is critical, not only at the closing, but before and after as well. What this means is “witness or notary closings” are not allowed.

NREIS and other non-attorney settlement service providers were contracting with licensed attorneys to simply attend the closing and witness and notarize the signing of the documents. The attorney was paid by NREIS a small fee for this service. However, the attorney had no involvement in the process otherwise and had no knowledge of the quality of title or the accuracy of the documents being signed. The SJC has determined that, because there are  substantive legal rights and interests at stake in a closing, hiring contract attorneys for witness or notary closings violates the law.

It remains to be seen whether NREIS and other out-of-state non-attorney settlement service providers will change their business model to conform with the ruling in order to continue doing business in Massachusetts. Regardless, this is a long-awaited ruling from the SJC and a huge win for Massachusetts licensed attorneys as well as consumers.

To read the entire ruling, click here.

Reverse mortgage applicants are among the losers in the budget deal cutting $38 billion in spending that President Obama and Congressional Republicans worked out to avert a government shutdown.

The eleventh-hour deal, which President Obama recently signed into law, cuts $88 million from the Department of Housing and Urban Developments (HUD) budget for loan counseling programs, including about $9 million for reverse mortgage counseling. Reverse mortgage borrowers are required by law to receive counseling before they sign up for such loans. With federal money no longer available to pay for counseling, many prospective borrowers will likely have to foot the bill themselves, which may discourage potential applicants.

A reverse mortgage allows homeowners 62 or older to convert the equity in their home to a flexible cash advance that does not have to be repaid until the homeowner moves, sells, or dies. Almost all reverse mortgages are made under the Home Equity Conversion Mortgage program, which is administered by HUD.

While reverse mortgages look like no-lose propositions at first glance, they are complex products that have significant downsides for some. For example, these loans carry large insurance and origination costs, they may affect eligibility for government benefits like Medicaid, and they are not ideal for parents whose major objective is to safeguard an inheritance for their children.

To help seniors make informed decisions about whether to obtain a reverse mortgage, Congress requires prospective borrowers to obtain adequate counseling by an independent third party.

Counseling funds will be cut off October 1, 2011.

To read an article on the counseling cut in the New York Times, click here.

New rules for loan officer compensation went into full effect on April 6, 2011 after a federal appeals court lifted an order staying their implementation.

The rules are aimed at eliminating incentives for loan originators to “steer” borrowers into loans with higher interest rates which would produce higher commissions for the loan officer.

The National Association of Independent Housing Professionals (NAIHP) and the National Association of Mortgage Brokers (NAMB) filed legal challenges of the rules last month in U.S. District Court, claiming the Federal Reserve Board lacked the authority to regulate mortgage brokers and that the rules were “arbitrary and capricious.” The court denied the  motions for a temporary restraining order and preliminary injunction.

Independent mortgage brokers, unlike mortgage originators employed directly by banks, work independently, brokering loans through multiple lenders. They argue that the rules favor mortgage originators employed directly by big banks, which will ultimately destroy their business.

With the new rules in effect, loan officers now earn their compensation based on the loan amount, not the interest rate.

For a summary and an opinion of the new rules, click here.

Massachusetts Real Estate Law Firm

Serving the North Shore and Greater Boston with Offices in Newburyport & Boston

Michael B. McCarthy, Attorney at Law

Welcome – my name is Michael B. McCarthy and I am a real estate attorney. My goal is to provide you and/or your clients with smooth, cost effective and efficient legal representation in the process of buying or selling a home.

Title and Escrow Services for Buyers, Sellers, Realtors and Lenders

My practice focuses on real estate law.

In today’s real estate market, buying and selling a home can be a complicated process, not to mention probably the single most expensive purchase or sale you or your client will ever make. Any number of issues can pop up with such a large undertaking. When this happens, we will work as a team to  negotiate a favorable outcome for you and/or your client, resolving the matter and closing the deal without time-consuming and potential costly issues.

Why hire Me?

Superior Service and Personal Attention

When you hire me, your interests lie in the hands of a highly capable, experienced, real estate attorney. I devote more time and energy to each of my clients than most law firms do. Unlike other firms where the majority of the work and most communication is completed and directed to a paralegal or secretary, I will personally be working on your loan to close as quickly as possible without any miscommunication. When you call my office, you will be able to reach me because I pick up my own phone. And if by chance, you leave a message, I guarantee to return your call within 24 hours, with most calls returned by the end of the day.

Superior Turn Around Time

We will provide excellent professional customer service, open and first-rate communication, prompt title searches, accurate documentation, and timely disbursement of documents and funds.

24/7 Settlement Services

We offer settlement services 24 hours a day, 7 days a week. We will close at any time, day or night, and wherever the borrower chooses.

Reasonable Rates

It’s really very simple – I help you achieve your goals more efficiently and more economically than many other law firms. I do this by offering comparatively low fixed rates, through experience, and through first-hand attention to every aspect of your real estate matter.

Loan Disbursement Options

All parties have the option of having their funds wired or sent via overnight courier when disbursement occurs.

Focused on Representing Buyers, Sellers, Realtors and Lenders in Real Estate Transactions

Below, you’ll see a list of services I provide to my clients.

Real Estate Conveyance and Settlement Services

• Production of Title Exam
• Generation of title commitment to insure title
• Clearance of of all title issues prior to closing
• Preparation of HUD-1 Settlement Statement
• Review and Explanation of HUD-1 Settlement Statement with Buyer and/or Seller prior to closing
• Scheduling (with all parties involved) and closing the transaction
• Disbursing funds and payoff of current mortgage(s) on the property
• Convenient online title order service
• Attorney available for consultation prior to and during closing process
• Direct communication with our closing attorneys via phone and email
• Flexibility to close in your home, business, our office, or at the location of your choice
• Evening and weekend closings

General Real Estate Services

• Drafting of Real Estate Contracts
• Real Estate Contract Disputes
• Title Issues and Disputes
• Real Estate Sales Representation and Disputes
• Real Estate Broker and Agent Liability Issues
• Title Insurance Claims
• Commercial Tenancy Legal Issues
• Real estate investment Planning, Disputes and Issues
• Lending/Lender Problems and Issues
• Commercial Landlord/Tenant Disputes
• Homeowner Association Issues
• Commercial Leases, Subleases, Lease Assignments or Termination Agreements
• Option Agreements

Contact me at mccarthy@newburyportrealestateattorney.com or call me today at 978.270.2189 - I look forward to hearing from you.

Massachusetts Real Estate Lawyer | Newburyport Real Estate Attorney | Boston Real Estate Lawyer

*This testimonial or endorsement does not constitute a guarantee, warranty, or prediction regarding the outcome of your real estate transaction.