17 Accord Park Drive, Suite 106, Norwell MA 02061


Working with representatives of the Real Estate Bar Association, the Boston Bar Assocation, the Registers of Deeds Association, the Title Insurance Industry, The Abstract Club and the Massachusetts Bar Association, the Land Court has issued new and revised guidelines dated as of February 27, 2009.

Twenty-two existing guidelines have been revised and ten new guidelines have been issued.

New guidelines include the following:

Guideline 55-Approval by the Chief Title Examiner. This guideline sets forth specific instruments which will require the prior approval of the Land Court’s Chief Title Examiner or an Order of Court, before the document will be accepted for filing by Land Registration Districts.

It is suggested that together with the original papers to be approved, the Attorney should submit an attested copy of the outstanding certificate or a copy of the last prepared certificate and an attested copy of the deed into the current record owner. In all instances, any applicable appeal period should have passed. Instruments which require approval include fiduciary deeds, other probate decrees, bankruptcy instruments, motions to avoid judicial lien, instruments from a pension fund as mortgagee, exception deeds as permitted pursuant to guideline 18, partition by sale involving registered land and certain instruments concerning successor trustees or removal of trustees.

Guideline 56-Bank Mergers. M.G.L. c. 183, § 55 provides that in the case of a mortgage discharge, assignment or partial release the inclusion in the document of a recitation as to any merger, consolidation, amendment, conversion, or acquisition of assets causing a change in name or identity of the entity executing the instrument without further documentation is acceptable. This guideline states that such a recitation does not and cannot cure a situation involving an unregistered assignment.

The use of the phrase “formerly known as” shall be interpreted as a name change unless there is reason to believe it is being used for another purpose. If there is no recitation in the document, or the document is not covered by the statute, an alternative method of proving the succession of bank interests may be utilized. In this case, a certificate prepared by a Massachusetts attorney may be submitted to and approved by the Chief Title Examiner, which certificate shall identify the registered instruments and/or certificates of title to be affected by the new documents, the names and identities of the lender entities involved, the complete line of merger, acquisition and changes of name to show an unbroken line connecting the record title holder to the party in question.

Such information may be obtained on the Internet including the FDIC site, the site for the National Credit Union Assocation, and the site of the Office of the Comptroller of the Currency.

Guideline 57-Condominiums: Approval of Condominium Documents. This extensive guideline attempts to clarify when Land Court approval is required. Prior to filing a Master Deed together with related instruments and plans in a Registry District, Land Court approval is required. In addition, Amendments to Master Deeds and related instruments and plans also require prior approval by the Land Court. The Condominium Trust or by-laws, nor amendments to said condominium trusts or by-laws, do not require a Justice’s signature to be registered.

The Guideline describes the documents that must be submitted for approval and the extent of review. The Court’s approval does not mean that the Court considers any provisions other than those reviewed to be lawful or enforceable. The provisions that are not reviewed include those to do with rights and procedures regarding phasing or other retained developer rights and interests.

The Guideline also includes a list of those documents which need to be submitted to the court for review which include the Master Deed, Condominium Trust or By-Laws, a copy of the owner/declarant’s certificate of title, the Site Plan, and Floor Plan.

The Guideline further includes a listing of Master Deed requirements by-law requirements, and floor plan requirements.

Finally, the guideline establishes a procedure to have the land withdrawn from the provisions of M.G.L.  c. 185. This issue is further covered in guideline 63 and 64.

Guideline 58-Conveyances by Cities and Towns. The grant of easement or a deed from a city or town should be accompanied by a municipal clerk’s certificate which recites and/or gives evidence of the authority by which the grant or deed is being made.

M.G.L. c. 44, § 63A provides that whenever a city or town sells any real estate, the board or officer executing the deed shall, as a condition precedent to the power to deliver the deed, receive from the grantee a payment in lieu of real estate taxes. The statute also provides that a recitation in the deed of full compliance with the provisions of the statute shall be conclusive evidence of such fact. Therefore every deed from a city of town should contain such a recitation. Any deed from a city or town not containing such a recitation must be approved by the Court or the Chief Title Examiner or his or her designee.

Guideline 59-Indefinite References. This guideline provides that it is permissible to refer in a mortgage, collateral assignment of leases and rents or similarly registered instrument to a promissory note, security agreement, construction agreement, construction loan agreement, option agreement, purchase and sale agreement, or similar agreement to which the mortgage or other registered document is given as security even though the agreement referred is not registered with the mortgage.


Guideline 60-Mortgages Affecting Appurtenant Easements. This guideline provides that when a Certificate of Title includes on its face an appurtenant easement for the benefit of the registered land, a mortgage, registered or recorded against the title of the servient estate should not be noted on the Certificate of Title of the dominant estate. Further, when the title to the registered land described in a Certificate of Title is subject to an easement for the benefit of recorded land, a mortgage recorded against the title of the dominant estate should not be noted on the Certificate of Title of the servient estate.


Guideline 61-Mortgages: Discharge Notations for Expired Mortgages. This guideline, which provided pursuant to M.G.L. c. 260, § 33 provides for a method for discharging mortgages which have expired 35 years after the date of registration of the mortgage or 5 years after the stated term or maturity date.


The Land Court has prepared a specific form to be prepared by the attorney requesting discharge notation.


Guideline 62-Trusts: Expired. This guideline provides an outline for how to proceed when the current owners trust has expired whether by expiration of a term of years or following the death of one or more persons.

As noted in the guideline, there are too many different factual patterns to describe them all in the guideline; however, if less than one year is elapsed since the expiration of the trust the facts should be presented to the Chief Title Examiner, accompanied by a certificate in accordance with the provisions of M.G.L. c. 184, § 35. If the Chief Title Examiner cannot approval the papers as presented, a Supplemental Petition will then be required.

Guideline 63-Voluntary Withdrawal. This Guideline describes the voluntary withdrawal procedure by private owners who qualify under the governing statute M.G.L. c. 185, § 52 and public entities. For private owners, the premises may be withdrawn if the registered land constitutes less than fifty per cent of the total area of a single parcel or of two or more contiguous parcels in common ownership, or the registered land consists of less than ten per cent of the land area shown on the decree plan to which the original certificate of title pertains, the rest of said land area having been conveyed.

The premises may also be withdrawn for such other good cause, which must be stated with specificity in the complaint.

Premises owned by a public entity may be withdrawn as a matter of course. Public entity must file a complaint. This complaint is to be drafted by the plaintiff and is not the same complaint form as is used in the case of privately owned land. Filing fee is $50.00 and a title examination by a Land Court Examiner is required. 

Guideline 64-Withdrawal From Registration. This Guideline provides the procedure to withdraw land on which a condominium is declared which land consists of both registered and unregistered land. In a withdrawal procedure, the condominium documents are not reviewed and allowed by the Land Court. The Master Deed, Condominium Trust, Site Plans, and Floor Plans are recorded on the unregistered side only. The petition and notice described in the Guideline or filed in registered as soon as practicable after the recording of the condominium documents.

The Master Deed should specifically describe the registered land as parcel one followed by the recorded land parcel as parcel two. In addition a print of the condominium site plan should show the location of the registered land delineated in red.

Changes to existing Land Court Guidelines include the following:

Guideline 1-Acknowledgments: Requirements. Registration districts of the Land Court should not refuse to register documents either (a) because they bear official notarial seals and stamps which are not in the form, or do not contain the content, required by said Executive Order, or (b) because they do not contain the form of certificate of acknowledgement or jurat set forth in said Executive Order, provided, however, that those documents would have been acceptable for registration before the promulgation of Executive Order No. 455.

Guideline 10-Foreclosure of Lien for Common Expenses. The revised Guideline includes a caveat that if a subsequent 6 (d) Certificate indicates that there are no unpaid assessments outstanding, a complaint which was previously registered should be dropped upon conveyance of the unit, or a notation may be registered in accordance with Guideline 21, Expired and Obsolete Encumbrances.

Guideline 18-Descriptions in Deeds and Certificates of Title; Exception Deeds; Conveyances of Portions of Land. The revised Guideline now permits, under item 5, that the Court or Chief Title Examiner may, in their discretion, issue an order or grant an approval permitting the filing of deeds of remained parcels upon the showing by the owner of remainder parcel that it would be a substantial burden on the owner to comply with the requirement of a new plan of the remainder parcel. Examples of this would include, transfers or conveyances to family members or related entities.

Guideline 20Executions. Revised Guideline includes a notation that “if it is clear to the District, or upon the request of any interested party, it may be parked discharged or expired. Upon a subsequent conveyance and the issuance of a new certificate, it will be dropped. Any doubtful questions will be referred to the Chief Title Examiner”.

Guideline 25-Homestead. In addition to revising the statutory amount of the homestead, to $500,000.00 under Sections 1 and 1A, this Guideline specifically notes that while a declaration of homestead may be accepted for registration, that acceptance is not an adjudication on the part of the Court as to the validity or effectiveness of the filing. A declaration of homestead accepted for filing will be noted as a “Purported Homestead”. The Court’s acceptance of a declaration of homestead will not constitute the Court’s determination of the validity or effect of the filing;

a.)   Only one party who holds title as tenant by the entirety may file a declaration of homestead under Section 1 of the statute for the benefit of his or her family;

b.)   All parties who hold title as tenants in common may file declarations of homestead;

c.)   No party who holds title as trustee as to any interest, may file a declaration of homestead as to the interest held as trustee;

d.)   All parties who hold title as joint tenants may file declarations of homestead; and

e.)   Life tenants may file declarations of homestead

The Court will not prohibit multiple filings of homestead declarations, with the understanding that multiple filings by parties who are related may not be valid or effective, and that the acceptance of said filings by the Court is not a judgment on the validity of said filings or the impact of the filing of subsequent declarations on the validity of the initial filing.

Guideline 27-Leases and Notices of Lease. This Guideline has been revised by adding a provision regarding steps that need to be taken in order to file an amendment of a Notice of Lease for registration.

Guideline 34Lis Pendens. This Guideline adds as a final note that once dissolved, the lis pendens will not be carried forward to subsequent certificates.

Guideline 42-Mortgage Electronic Registration Systems. This Guideline notes that when MERS is the holder of the mortgage it should be listed as such on the encumbrance sheet without any reference to the institution for which MERS is holding the mortgage, whether or not the original mortgage or subsequently filed instrument affecting the mortgage makes reference to the party for whose benefit MERS is holding the mortgage.

Guideline 50-Tenancies by the Entirety. This Guideline has been revised in part by the addition of a section entitled “Establishing Tenancy by the Entirety.” This section incorporates the “Goodridge” decision by allowing a tenancy to be created without regard as to whether the two individuals are of the same sex or of the opposite sex.

Guideline 51-Trust: Conveyances to Trustees. This Guideline has been revised by referencing a certificate in conformance with provisions of M.G.L. c. 184, § 35 and further by adding the highlighted language to (a), that if the trust instrument recorded or filed for registration in another registry district in the commonwealth an attested copy of the trust instruments may be presented as an alternative to the original trust instrument, together with the certificate by an attorney, or given under oath by the trustee, certifying that the instrument or certificate of which the attested copy is provided is current, enforced, and not the subject recorded amendment.

Guideline 52-Trust: Conveyances by Trustees, incorporates Trustee’s Certificates pursuant to M.G.L. c. 184, § 35. In the case of attested copy of the trust declaration recorded in the Registry of Deeds or filed in a different registry district, an attorney’s certificate similar to the one noted above is also required.

Guideline 53-Trusts: Trustee’s Deed for Nominal Consideration. This Guideline has been revised by incorporating Trustee’s Certificates under M.G.L. c. 184, § 35. The second paragraph of the original guideline 53 has been stricken and reference is made to the requirements of other guidelines relating generally to instruments executed by trustees.

Notably missing from the new Guidelines is the Guideline concerning Powers of Attorney previously issued on November 18, 2008. This Guideline has provided that in conjunction with a foreclosure an attorney in fact may appoint another person or entity to make entry on its behalf whether or not the original power of attorney contains a substitution clause or the express right to execute additional powers of attorney. This Guideline is temporarily on hold. And is being further reviewed by the Land Court and the Guidelines Committee.

May 1, 2014   Comments Off on LAND COURT GUIDELINES


Following up on the Article which appeared in the January, 2014 issue of REBA News, this Article will address two (2) additional pitfalls for the conveyancer and for title examiners.  As always, please feel free to get back to me with any comments you might have regarding these issues.


The case of HSBC Bank USA, National Association v. Stephen Galebach and Others, 2012 Mass.App.Div. 155 considered the adequacy of an Affidavit of Sale under G.L. c. 244, §15 in the context of the summary process action.

In its Decision, the Court noted “In a Summary Process Action for Possession after Foreclosure by Sale, the Plaintiff is required to make a Prima Facie showing that it obtained the Deeds to the property at issue and that the Deed and Affidavit of Sale, showing compliance with the statutory foreclosure requirements, were recorded.”  See Lewis v. Jackson, 165 Mass. 481, 486-487 (1896).

In this case, the Foreclosure Affidavit notes therein as follows:

“2.  Central Mortgage Company, by and through its attorneys, caused a notice, of which the following is a true copy, to be published on November 25, 2010, December 2, 2012 and December 9, 2012, in the Medford Transcript, a newspaper having a general circulation in Medford.  (See attached Exhibit A)

3.  Central Mortgage Company, by and through its attorneys, also complied with Chapter 244, Section 14 of the Massachusetts General Laws, as amended, by ailing the required notices certified mail, return receipt requested.”

The Court notes that the Affiant did not cause the Notice to be published and make the mailings necessary to comply with Chapter 244, §14 of Massachusetts General Laws.

The statutory form for a Foreclosure Affidavit set out as Form 12 of the Appendix to G.L. c. 183 requires that the Affiant describe his or her acts in the first person.

It is imperative that an attorney preparing an Affidavit of Sale or reviewing one as part of a transaction be certain that the Affidavit complies with the requirement of the Statute.  Not only must the Affidavit include a jurat, but also must be drafted so that the Affiant shows personal knowledge.



Following the case of In re Traverse, 485 B.R. 815 (2013), the case of In re Woodman, 2013 WL 4498927 is a further example of the harsh results of the failure to properly record or file a mortgage.

In the Traverse case, a refinanced mortgage went unrecorded and therefore unperfected leaving the lender, JPMorgan Chase, unsecured.

In the Woodman case, both the first and second mortgages were improperly recorded rather than filed on the registered land side in Essex County.  The Judge allowed the mortgages to be avoided by the Bankruptcy Trustee citing M.G.L. c. 185, §57 which provides:

“An owner of registered land may convey, mortgage, lease, charge or otherwise deal with it as fully as if it had not been registered.  He may use forms of deeds, mortgages, leases or other voluntary instruments, like those now in use, sufficient in law for the purpose intended.  But no deed, mortgage or other voluntary instrument, except a will and a lease for a term not exceeding seven years, purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties, and as evidence of authority to the recorder or assistant recorder to make registration.  The act of registration only shall be the operative act to convey or affect the land, and in all cases the registration shall be made in the office of the assistant recorder for the district or districts where the land lies.”

and M.G.L. c. 185, §46 which further provides:

“Every plaintiff receiving a certificate of title in pursuance of a judgment of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on the certificate, and any of the following encumbrances which may be existing . . .”

The Court concludes “. . . the Woodmans’ Certificate of Title makes absolutely no reference to either the Citi or Nationstar Mortgage.  Nothing on the Certificate of Title would prompt a purchaser to search for these mortgages anywhere, and accordingly the Trustee had no constructive notice of them.”

May 1, 2014   Comments Off on TRAPS FOR THE WARY, PART II


The increase in foreclosure activity has resulted in increased scrutiny of foreclosures by state regulators, consumer groups and title insurance companies. This article will take a brief look at some of the issues conveyancers should now be aware of when reviewing a foreclosure transaction as part of closing alone.

* * *

There was something rotten in Denmark. Denmark, Maine, that is, and a desperate homeowner facing foreclosure contacted Pine Tree Legal Assistance, a provider of legal services for low-income Maine residents.

The file was assigned to Thomas Cox, a retired Maine attorney, who had worked on foreclosure cases for Maine National Bank. Mr. Cox claims to have noticed almost immediately that the foreclosure file did not look right as the documents from the lender had been approved by an employee whose title was “limited signing officer.”

Enter Jeffrey Stephan, a 41-year-old resident of Sellersville, Pennsylvania, and the team leader of a thirteen-person department of GMAC Mortgage. For GMAC, Mr. Stephen, who has been assigned the super villain moniker of “robo-signer”, signed off on as many as 10,000 foreclosures a month.

Although Mr. Stephan had previously been deposed, it became clear that, contrary to the statements set forth in the affidavit, he had no personal knowledge of the facts stated in the foreclosure affidavit; that he did not have custody and control of loan documents; that he did not review the exhibits attached to his affidavit; and that he did not appear before a notary public.

The revelation that a “robo-signer” had signed off on foreclosures without having read the paperwork forced Ally Bank, which is owned by GMAC to halt foreclosures in all 23 judicial foreclosure states. Soon after, other major banks, including JPMogan Chase and Bank of America, also halted foreclosures initially in the 23 judicial states and subsequently in all fifty states.

A flurry of activity followed. Old Republic National Title Insurance Company released a bulletin to its agents that it would cease to insure title to properties that were foreclosed by GMAC and Fidelity National Title Insurance Company entered into a Master Indemnity Agreement with Bank of America to “facilitate the underwriting process of insured sales in which Bank of America and its affiliates is the lender or servicer.”

Following internal investigations by the nation’s largest lenders, foreclosure proceedings were re-instituted; and despite the conclusion by the various lenders that errors were minimal or non-existent, State and Federal Regulators, as well as the media, have not been so easily assuaged.

Attorneys General from all fifty states have joined to form the Mortgage Foreclosure Multistate Group. This group, which also includes mortgage regulators, issued a statement on October 13, 2010, which states in part, “It appears affidavits and other documents have been signed by persons who did not have personal knowledge of the facts asserted in the documents. In addition, it appears that many affidavits were signed outside the presence of a notary public, contrary to state law. This process of signing documents without confirming their accuracy has come to be known as ‘robo-signing’. We believe such a process may constitute a deceptive act and/or an unfair practice or otherwise violates state laws.”

Although the White House did not support a nationwide foreclosure moratorium, President Obama did pocket veto the National Notary Bill which would have required that all federal and state courts recognize any lawful notarization made by a notary public licensed or commissioned under the laws of the state where the Court is located if:

a. The notarization occurs in or affects interstate commerce; and

b. A seal of office, as a symbol of the notary’s authority is used in the notarization or, in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper resistant.

Consumer groups had warned that passage of the Bill, which had quickly passed through both Houses of Congress would create difficulties for homeowners who might want to contest questionable foreclosure sales and could possibly increase foreclosure fraud.

Mortgage Electronic Registration Systems, Inc. (MERS)

Questions concerning foreclosure practice raised by state courts, Attorneys General and consumers have led regulators to investigate Mortgage Registration Systems, Inc. (hereinafter “MERS”).

Since the advent of MERS, conveyancers have debated the treatment of MERS as a mortgagee and have questioned the failure of “lenders” to endorse the note as the mortgage is internally transferred within the MERS system.

When a foreclosure is initiated, the mortgage is assigned by MERS to the present “holder”. The original mortgage may run to MERS as nominee for “X” and the recorded assignment may run from MERS to “Y”. The assignment from “X” to “Y” was “off record”. This failure to record assignments has caused the State of Tennessee, by a realtor, to bring a Qui Tam suit against MERS, alleging that the “defendants were concealing and avoiding the payment of recording fees or other monies to the above named counties in this and other states…”

In a recent Opinion in the State of Maine, the Maine Supreme Judicial Court held that MERS could not institute a foreclosure action and invoke the jurisdiction of the Court because it lacked enforceable right in the debt that secured the mortgage. See Mortgage Electronic Registration Systems, Inc. v. Jon Saunders et al, 2010 ME 79.

More recently, the Register of Deeds for the Essex County (Southern District) Registty of Deeds, John L. O’Brien, Jr., contacted Attorney General Martha Coakley and requested that her office investigate MERS claiming that MERS has created its own registry of deeds and is not paying recording fees.

The most serious allegations have been raised by two law professors, Adam Levitan of Georgetown and Christopher L. Peterson of the University of Utah. As reported in the New York Times in October 2010, Mr. Peterson has questioned MERS’ attempt to have it both ways, acting as an agent in some cases and as a mortagee in others.

If MERS were a mortgagee, it could record loans in its own name, but since it does not own the loan it would violate the basic tenet that the assignment of the note carries the mortgage with it. “If the assignment of the note is a nullity, then the mortgage can no longer be enforced. The borrower would still owe the money, but no foreclosure would be possible and the borrower could still sell the house without paying off the mortgage.”

As an agent, MERS cannot list itself as mortgagee because various state laws require transparency and do not have provisions authorizing the use of shell companies.

Peterson further argues that local governments might sue MERS to collect recording fees and that this would have been avoided if legislation had initially been sought when MERS was created and if parties “followed the simple policy of specifying in the documents who owns what, a vast amount of confusing litigation and commercial uncertainty could have been avoided.”

The future of MERS seems uncertain, as lawyers for homeowners allege that MERS does not properly track the required paper trail to prove mortgage ownership. In October 2010, JPMorgan Chase Bank’s CEO stated that the bank had stopped using the MERS system.

REO Sales Risk Assessment

Several title insurance companies have issued underwriting alerts providing guidance on insuring sales of REO properties. These memorandums require a closing attorney to closely examine the foreclosure process pursuant to customary underwriting standards; and in addition, review or complete an REO Sale Risk Assessment Questionnaire. All questions on said Questionnaire must be answered with a “Yes” or “No”; and the form must be dated and signed by the agent reviewing the title and maintained in the title file.

If all questions have a “No” answer, the agent is authorized to issue a commitment or policy on behalf of the Company, subject to any other risk limitations that may be applicable, such as the agent’s authority limits or concerns related to other title matters. If any question has a “Yes” answer, the title company’s State Underwriting Department must be contacted for specific written approval to issue. The agent must retain a copy of the approval bearing the signature of the State Underwriter.

In addition to questions revolving around customary review of the foreclosure, the disclosure of any defects in the foreclosure process by the lender/seller or any other reasons to believe there might be defects in the foreclosure process by the lender, lender’s counsel, loan servicer or others, the Questionnaire includes the following:

a. Is there any affiliation between the seller and purchaser in the present transaction?

b. Does the purchase price exceed the amount due to the lender under the obligation secured by the mortgage that was foreclosed?

c. Is the property occupied?

d. Has litigation alleging defects in the foreclosure process related to the property been commenced or threatened?

In addition to this Questionnaire, several companies have provided a “Buyer’s Affidavit” which, in addition to the typical Mechanic’s Lien Affidavit, requires the buyer to note if the property has been visited by the buyer the buyer did not observe any tenants or other parties in possession; the buyer saw no evidence of work being performed on the premises; and the buyer has inspected the inside and outside of the premises.

You should check with your title insurance company to see whether they are requiring this additional Buyer’s Affidavit or a Risk Questionnaire. Even without requiring these new closing documents, a careful attorney should consider the questions being raised and should use additional care when closing post-foreclosures.

Saric – Affidavits

In the case of Federal National Mortgage Association v. Davor Saric 2010 Mass. App. Div. 177 the District Court’s Appellate Division determined that a certified copy of a recorded Affidavit of Sale “did not present competent evidence” that the Plaintiff Mortgagee had good title to the Defendant’s condominium unit.

Federal National Mortgage Association (hereinafter “FNMA”) had filed a suit to evict the Defendant – Appellant, Davor Saric, following a foreclosure sale. The Court determined that FNMA’s documentary evidence did not meet the evidentiary requirements for admission. The Court determined that as FNMA did not lay a foundation for the introduction of “secondary evidence”, FNMA was limited at trial to introducing the original deed to lay the proper foundation for the introduction of secondary evidence. The certified copy of the deed to FNMA was not accepted as evidence.

The Court further stated that “similarly, although G.L. c. 244 s. 15 directs that an Affidavit of Sale showing that the ‘requirements of the power of sale and of the statute have in all respects been complied with…’ shall be admitted as evidence that the power of sale was duly executed.” The affidavit here did not meet those statutory requirements for admissibility.

The form of affidavit in the Saric case follows the form set forth in G.L. c. 183, App. Form 12 with the exception that the execution line merely reads “PHH Mortgage Corporation f/k/a Cendant Mortgage Corporation.” The recorded affidavit omits the line “sworn to by the said…” If this was an issue for the Court, there is no reference to it in the Opinion. As is noted in the excellent article by William B. Hovey and Michael Pill, Foreclosure Fallout: Don’t Become a Casualty, published in the December 20, 2010 edition of Lawyers Weekly, it is noted that no Massachusetts case has addressed the issue of whether a foreclosure affidavit must be based on personal knowledge. As part of scrutinizing the foreclosure procedure, the issue has arisen of who must execute the affidavit. The attorney typically caused the publication to be done and has also overseen the compliance with G.L. c. 244 s. 14 while the lender is typically the party aware that the principal and interest obligations mentioned in the mortgage have not been tendered prior to the sale.

Calling into question the validity of the affidavit itself potentially raises even more serious issues.

Title Insurance

Historically, title insurance has been a whipping boy for the major media publications, most of which question whether anyone has collected on a title insurance policy. As noted in an October 8, 2010 New York Times article, “It ultimately feels like a tax – an extortionate one at that – and not a protective measure.”

Finally, title insurance is being viewed as a valuable commodity. In Massachusetts, those who purchased owner’s title insurance policies may now breath easier if their title is clouded by an Ibañez situation. Nationally, those who have purchased title from foreclosing lenders whose interest in the mortgage may now be questioned can also breathe easier. Still, even articles that admit to the value of an owner’s policy of title insurance still acknowledge that title insurance remains a mysterious proposition for homebuyers.

Federal Housing Finance Agency Guidelines

On October 1, 2010, the Federal Housing Finance Agency implemented a four-point policy framework detailing its plan to identify foreclosure process deficiencies. Said four-point policy framework includes the following:

1. Verify Process 
Mortgage Servicers must review their processes and procedures and verify that all documents have been completed in compliance with legal requirements. If the Servicer’s review reveals deficiencies, the Servicer must take immediate corrective action.


2. Remediate Actual Problems
When a foreclosure process deficiency has been identified, it must be remediated in a timely fashion. If the Servicer identifies shortcomings with regard to foreclosure affidavits, the following steps should be taken:

a. Pre-Judgment Foreclosure Action
Servicers must review any filed affidavits to ensure that the information contained in the affidavits is correct and that the affidavits were completed in compliance with applicable law. If the review indicates that the affidavit was not correct or was not completed correctly, the Servicer must work with foreclosure counsel to take appropriate remedial actions.

b. Post-Judgment Foreclosure Action (Prior to Foreclosure Sale)
Before a foreclosure sale can proceed, Servicers must review any affidavits relied on in the proceedings to ensure that the information contained in the affidavits iss correct and that the affidavits were completed in compliance with applicable law. Again, if the review indicates that the affidavit iss not correct or was not completed in compliance with applicable law, the Servicer must work with foreclosure counsel to address the issues.

c. Post Foreclosure Sale (Including Eviction Actions and Real Estate Owned Sales)
In the case of eviction actions, Servicers with deficiencies must confirm that the information contained in any affidavits iss correct and that the affidavits were completed in compliance with applicable law. With respect to clearing of title for REO properties, again, information set forth in all affidavits must be confirmed and said affidavits completed in compliance with applicable law.

In the case of bankruptcy cases, all affidavits must be reviewed.

Servicers are further reminded to report any fraudulent activity and to avoid delay when all foreclosure alternatives have been unsuccessful.

Foreclosures have always required additional scrutiny by conveyancers. It is particularly important now that conveyancers not only be aware of the various quirks, i.e. Special Notice to the Internal Revenue Service and Special Notice pursuant to M.G.L. c. 61A, but should also be checking all foreclosed parties for bankruptcy; determine all foreclosure papers were properly executed and authorized; and determine whether the property being closed is presently vacant.

April 30, 2014   Comments Off on CURRENT FORECLOSURE ISSUES


Martin Loria and Joel Stein



As previously reported, the case of U.S. Bank National Association, Trustee v. Ibañez invalidated a foreclosure where the foreclosing entity did not hold the mortgage of record at the time of the first publication pursuant to M.G.L. c. 244 § 14. The decision calls into question REBA Title Standard No. 58 entitled “Concerning Out of Order Assignments.” The impact of the decision on mortgage discharges based on out of order assignments is uncertain.

To date, there have been no decisions on how to proceed when a title is based on a foreclosure that fails to comply with the Ibañez decision. It is clear that if the current owner has an owner’s title insurance policy, the company that issued the policy would allow an agent to issue title policies to proposed owners and lenders. Otherwise, it is important to understand that taking title from a foreclosure which violates the Ibañez decision would, at best, result in your purchaser being a holder of the mortgage rather than a holder of the fee interest.

One suggestion which I have heard from a title insurance company employee would be to have an owner, who purchased from a foreclosure that is invalid pursuant to Ibañez, record a Certificate of Entry which would allow their interest as mortgagee to ripen after three years of uninterrupted possession. Although it doesn’t provide immediate relief, and still leaves open the question of the validity of junior liens, it is the only pro-active suggestion that I have heard to date.            JS



A concerned call from a fellow conveyancer resulted in my revisiting the issue of the “four unities.” In this instance, the conveyancer has previously prepared a deed from A and B, as tenants in common, to A and B, as joint tenants. A had subsequently died and when B went to sell the property, the bank attorney required a probate for A. Despite the fact that this scenario is frequently utilized to transfer title from two people as tenants in common to themselves as joint tenants or tenants by the entirety, at least one title insurance company insists that this grant violates the “Four unities” of a joint tenancy. The essence of joint tenancy is that two or more persons take and hold the title as if together they constitute one fictitious person. The Company argues that this violates the principle that you cannot convey title to yourself and further violates M.G.L. c. 4 § 6 clause 4th. Although their view is in the minority, this is an issue which should be considered when preparing a deed between related parties.            JS



The recent economic downturn and consequent foreclosure crises have created new issues  affecting the closing process, some of which are potentially title related.  We have seen the proliferation of “short sales” throughout Massachusetts.  This form of loan payoff occurs when the outstanding loan balance of the seller’s first (and possibly second) mortgage exceeds the proposed sales price.  After protracted negotiations with the lender, the seller may come to terms with the mortgagee/servicer who, as a condition of releasing the lien and allowing the transaction to proceed, agrees to take less than the full outstanding loan balance, subject to various underwriting conditions.  These transactions may take a few months to finalize and the potential buyer may or may not be able to wait out the process, including payment of additional fees to extend his loan commitment.   When the seller’s lender does agree to terms, a payoff letter is issued containing numerous conditions.

The conveyancer representing the buyer’s lender, or buyer, if a cash transaction, must exercise all due diligence and caution in reviewing the terms of the payoff letter.  Unlike the standard loan payoff letter in a normal transaction, a short sale payoff letter has conditions allowing the lender to revoke its payoff.  Most common among these provisions is what is known as a “lookback” provision.  The terms are essentially that the lender has received the payoff tendered by the conveyancing attorney and may subsequently refuse to issue a discharge if the property is re-conveyed within thirty (30) days of the closing or another arbitrary date.  In addition, this provision will also allow the lender to withdraw if it suspects fraud by any of the parties.

The issue the conveyancer has, of course, is that he has no control over the transaction once the loan closes.  In the event that the new buyer/borrower transfers the property to a third party for additional consideration, or even the same consideration, the original seller’s mortgagee may determine that the entire transaction was fraudulent.  This leaves the conveyancer in the unenviable position of having closed, recorded, released finds, written a title insurance policy and subsequently having no recourse against anyone.  The seller is long gone, the borrower/perpetrator is gone and the title insurer is exposed.

The issue that we are faced with is whether or not the conveyancing attorney will have any control over the situation or simply refuse to close the loan.  Certainly, one can attempt to verify the trustworthiness and veracity of his/her buyer/ borrower, but, as we all know, this may not amount to very much.  An attempt can also be made with the seller’s lender to delete the offensive language from the payoff letter.  This may also be met with limited success depending the identify the lender.  These transactions should not be closed unless the title insurer has agreed to the terms of the short sale letter so that they can fully evaluate the risk.  One remedial provision is to insert a restriction in the deed from the seller to the buyer prohibiting any transfers within the period of time for which the seller’s lender has a review period.  At least this should insure that there are no legitimate lender financed record transfers within the period of time when the lender may look at the title on their own.  With the simplicity of on-line access, the seller’s lender certainly may look at title prior to issuing the discharge.

In addition to the “lookback” provision frequently encountered, the conveyancer may also find requirements that the HUD must be pre-approved within a certain period of time and that additional loan documents may need to be executed by the seller for the amount of debt reduced at closing but to be paid later.  The instructions of the lender must be followed exactly as non compliance with any of the terms will constitute grounds for their refusal to accept a payoff and issue a subsequent discharge.  ML



In light of the various U.S. Bankruptcy Court and Massachusetts Land Court decisions affecting foreclosures, an issue as to unreleased homesteads is becoming more frequent.  The situation arises where the mortgagor, subsequent to acquiring title and prior to a refinance, declares a homestead.  Frequently, the subsequent mortgage contains the automatic release.  Various national lenders often add the marital status to the granting language on the first page.  Consequently, there may be a homestead filed by the sole property owner followed by a mortgage which says “a married person”.  If the conveyancer who closes the refinance does not obtain the signature of the non debtor spouse, this person may have a homestead right in the property.  The issue arises when the mortgage is foreclosed and, of course, there is no release of the homestead.  If there were a subsequent or a second or third transfer involved, the issue would not be apparent as the premises would presumably not be occupied by the original non debtor spouse. However, when title derives from the foreclosing lender, one has no knowledge as to whether the property is occupied or not, as often the bidder at the auction cannot enter.  Consequently, the conveyancer should consider obtaining affidavits from the foreclosing attorney to the effect that at the time of the auction, the premises were vacant inasmuch as the abandonment of the property will terminate the homestead rights of the non debtor spouse.               ML



REBA has been contacted by several conveyancers who expressed concern that they were being charged $365.00 by the Town of Natick for a residential condominium municipal lien certificate. The condominiums in question, Nouvelle at Natick and 79 East Central Street were created through the combining of several previously separately assessed parcels. The Town Counsel has referenced M.G.L. c. 40 § 22F entitled “License Fees, Service Charges; Acceptance of Action” which, in part, reads as follows:

Any municipal board of officer empowered to issue a license, permit, certificate, or to render a service or perform work for a person or class of persons, may, from time to time, fix reasonable fees for all such licenses, permits, or certificates issued pursuant to statues or regulations wherein the entire proceeds of the fee remain with such issuing city or town, and may fix reasonable charges to be paid for any services rendered or work performed by the city or town or any department thereof, for any person or class of persons; provided, however, that in the case of a board or officer appointed by an elected board, the fixing of such fee shall be subject to the review and approval of such elected board.

The question remains as to whether a charge of $365.00 for a municipal lien certificate is “reasonable.” Certainly, a substantial amount of work is involved to create the first municipal lien certificate for a newly developed condominium, which condominium may be the result of combining several different parcels. In the case of Nouvelle at Natick, the condominium is a portion of the Natick Mall. However, in the case of Nouvelle at Natick there are 215 units in the residential condominium. A charge of $365.00 for the first municipal lien certificate to issue for each unit will result in a total charge of $78,475.00.

Conveyancers should also make their lenders aware of this situation. A $365.00 charge for a municipal lien certificate which is not disclosed on the GFE, will almost certainly result in a problem at the closing table.   JS



There exists a great deal of concern in the conveyancing community regarding cost reflected in Line 1101 of the new HUD-1. As I am writing this in December, there is some uncertainty as to how loan originators will treat the bundled fee amount that must be provided to them by attorneys. Some conveyancers have expressed concern that a typical charge for obtaining a mortgage discharge (in the case of a refinance), which is not included in the set bank fee will fall by the wayside. The fee that the attorney provides to the loan originator must include an estimate of typical fees the attorney incurs when doing a refinance or a sale. The plot plan is also a charge that will also be included in Line 1101 costs. Most lenders and title insurers no longer require plot plans. You will need to talk to their title insurance company to see what they require in the case of issuing an enhanced owner’s policy.

Concerning recording fees, a registered/recorded transaction will probably result in a violation in the tolerance; recording a deed and two mortgages on both the recorded and registered side will result in $475 in additional fees. Although tax stamps are typically not an issue, as they are seller paid, an interfamily transaction as part of a refinance might cause a problem if consideration is to be shown on the deed, or even if a recording fee for a new deed is incurred.

A new GFE can be issued if there has been a change of circumstance, although I am not certain if that phrase has been really defined. Also be aware that the new Truth-In-Lending Rules exist alongside the new RESPA Rules. Therefore, if there is a 1/8th point change in the APR, a new Truth-In-Lending Statement will be required. This is a totally different issue from whether a new GFE is required.

Finally, if there is a violation of the tolerance provisions, the lender has 30 days to make payment to the borrower. At that point, a new HUD-1 needs to be prepared and a credit to the borrower needs to be shown on the HUD-1. It is uncertain now as to whether a separate closing will need to take place, or whether the lender will simply have a new HUD-1 mailed to the borrower.

There is much that could be said about the new RESPA Rules; however, at this point it is best to see how everything plays out in the next few months. Look for REBA to have a seminar on the new Rules at our main meeting.   JS



The Consumer Financial Protection Agency Act of 2009 includes extensive new regulation of attorneys that would result from the definition of “financial activity” under the Bill. The expansive definition of “financial activity” includes providing real estate settlement services and would make lawyers and other settlement service providers subject to the proposed registration requirements as “financial activity” providers. As of writing, the exclusion for lawyers is limited to: “an attorney licensed to practice law in compliance with the applicable rules and standards of professional conduct, but only to the extent that the consumer financial product or service provided is within the attorney-client relationship with the consumer…” In the typical closing scenario, the attorney’s client is the lender rather than the borrower. As written, this would require registration as a “financial activity” provider.  JS