To the editor:
Editor’s note: Southern Essex District Register of Deeds John L. O’Brien Jr. addressed this letter to the Massachusetts House of Representatives’ Judiciary Committee on July 30.
Dear members of the Judiciary Committee:
I am writing to you today to express my full and wholehearted support for House Bill 1576 and Senate Bill 1060: An Act to increase transparency in the Massachusetts land record systems to protect the property rights of homeowners and businesses.
These bills are extremely important in the fight against property fraud and ensuring transparency of land records. My registry has led the fight against mortgage fraud since 2011, working alongside forensic analysts and consumer advocacy groups to protect the integrity of our land records and the rights of the citizens I serve.
This Act would go a long way towards ensuring that the land records maintained by the 21 registries of deeds remain transparent and discernible to those whose records we maintain, the citizens of the Commonwealth of Massachusetts.
By examining the records at a registry, one should be able to identify the entity with which a mortgage originated and the entity currently holding the loan, as well as any that may have held it in between.
Unfortunately, that is no longer the case. Although not explicitly required by law, up until recently, it had been common practice to file any and all assignments of mortgages with the registry of deeds.
Wall Street and the Big Banks realized that if they could track assignments internally with a private centralized database they could avoid paying the recording fees and administrative costs of preparing and executing assignments every time they bought and sold mortgages.
This has led to confusion for the borrowers, because the originator may no longer hold the loan, but there was no record accessible that stated who did hold it.
Not only does this have title ramifications for property owners, but it also has fiscal ramifications for the commonwealth and its municipalities.
If only one assignment had been filed per mortgage filed by MERS (the Mortgage Electronic Registration System), the Southern Essex County Registry would have collected an additional $21,795,795 in recording fees, $6.3 million of which would have been earmarked for local municipalities through the Community Preservation Act.
Those figures are only for the Southern Essex Registry of Deeds; they do not account for the other 20 registries, such as Suffolk and Middlesex South, which process more documents than Essex South.
We suspect that these Big Banks sold or transferred mortgages an average of five times each, which cost the Southern Essex Registry alone an estimated $108,978,975. By not recording these assignments, they were able to hide the true owners of the mortgages from the property owners, which led to the bundling of mortgages that were then sold to investors along with pension funds.
The value of the mortgages that they invested in was ultimately proven to be nowhere near the value they led the public to believe. This ultimately led to huge financial losses for those who were given false information as to the true facts regarding the validity of their mortgage.
I would urge all the members of the Legislature to watch “The Con,” a five-part docuseries (available at www.thecon.tv) detailing the 2008 financial crisis, and hear how this scam was conceived and the damage that it has done to the backbone of our country, namely the land recordation system whose accuracy and integrity has been compromised.
The fact that lenders are opposed to recording assignments should send up a red flag all by itself; if they have nothing to hide, why not record them? I also would like to extend an invitation to all the members of the legislature to visit our registry, one of the crime scenes, and view firsthand the over 39,000 fraudulent documents on public display. It is one thing to talk about fraud, quite another to see it.
I completely support the passage of these bills and wholly believe that they will help the citizens of our commonwealth as well as restore a modicum of confidence that Massachusetts General Laws are being drafted to help protect and serve them, and not Wall Street banks.
John L. O’Brien Jr.
Register of Deeds
Southern Essex District
