"It's like a pseudo-concert line; people are queuing up at the crack of dawn just to get their deeds recorded."

That's how Ruth Dillingham, special counsel for The First American Title Insurance Company in Boston, describes the Middlesex County, Massachusetts (Southern district) Registry of Deeds. The county's tardiness in getting its fiscal year budget done has caused a budget crunch that is wreaking havoc on attorneys trying to get titles recorded.

"The counties, which administer the registries, get their income from the state budget and when the budget finally was completed for Middlesex County, the budget cuts worked retroactively as well as prospectively, causing cuts in registry staff, which led to tremendous backlogs we have now," explained Dillingham, who has been keeping a close eye on the situation for several months. "Middlesex is the biggest registry in the commonwealth because it encompasses several mid-sized cities like Cambridge and several towns where everyone is doing refinancing on their homes."

According to Sami Baghdady, public relations and membership chair for the Massachusetts Conveyancers Association (MCA), the problem is that the budget cuts weren't announced until midway through the last fiscal year. "The registries expected to have level funding —meaning they thought they would get the same funding as the prior year. So when the cuts were announced in December, the registries had already spent much more money than they were due to receive next year—it created quite a panic."

Baghdady said the most frustrating part for many of the registries is that they are considered "cash cows" because they collect more money than what they spend, especially through recording fees and excise taxes. "If every registry in Massachusetts was allowed to keep even half of what was collected, we would have enough to operate as a repository for the public of land records," remarked J. Mark Treadup, register, Bristol County (Southern district).

A horror show

It is customary in Massachusetts to stand in line at the registry and face an actual clerk to record titles, instead of mailing in documents, Dillingham noted.

To cope with the endless lines, some attorneys arrive at 5:30 in the morning just to wait in line. Peter Nordon, regional vice president for First American in Boston, told The Legal Description that some are even flat-out refusing to do any more recordings. "It's a horror show," he remarked.

Kevin Walor, an Attorneys Title Services Inc. supervisor in the Middlesex South registry, likened the situation at the registry to a deli counter at the local grocery store. In a memo to his clients, he indicated that only 85 numbers are given out each day on a first come, first served basis. Recorders are required to produce the documents they wish to record and identify each set of papers by address. There is a limit of five sets of papers per number – with no substitutions. That means, if a sale comes in at anytime during the day, it will not be recorded until the next day. There is also an express line for those who have just one set of documents to record.

"There are some fairly substantial commercial deals that are time sensitive that have not been able to get on record the day they needed to be. And because Massachusetts has a Good Funds Statute, that means that people don't get their money when they need it," Dillingham said.

There have even been rumors of fistfights breaking out in the lines, but Dillingham said she couldn't confirm that. "We're not sure who, but we've heard that someone intentionally jumped the line to the registry – just like in the cafeteria in grade school – and there were some very angry words exchanged."

And there are rumors floating everywhere - companies hiring people just to stand in the registry line and lenders working on refis and home equity loans simply mailing the registry in with a check for the recording because they want to avoid getting a title examination.

But even the mail is piling up at the registry, which means those deeds aren't always getting recorded on time, Dillingham said. "We had one agent call us to say he had a request from a lender to do a closing. The closing instructions said to pay off the first mortgage to A and home equity to B. But when he did his run down at the registry, the home equity loan to B didn't show up because it hadn't been recorded yet," she said.

A statewide problem

While Middlesex seems to be experiencing the glut of the budget cut problems, that isn't to say there aren't money troubles at other registries. While he couldn't comment on the situation in Middlesex County, John McLaughlin, the register of deeds for the Worcester Northern district, told The Legal Description that Worcester is experiencing similar shortages in budget. "Like all other registries in the commonwealth we are coping with less funds due to budget cuts but are still providing excellent services to all our customers," he said, adding that while 2002 has proven to be a record-breaking year for the volumes of documents received, the Worcester registry is finding ways to maintain efficient operations.

Some have just found ways to cope with slashed budgets. For example, Plymouth County, which the U.S. Census named as the fastest growing county in the commonwealth due to new construction and incoming population, has set up two satellite recording offices to cut down on some of the chaos at the recording desk. "They're now taking 40 to 45 percent of our non-land court recordings," noted John Buckley, register of Plymouth County.

And while the Middlesex North registry of deeds is busier than ever, Register Richard Howe Jr. says they do not have line problems and everything is up to date in his office. "In fact, right now, we're scanning documents that were recorded just two hours ago."

Middlesex North is one-third the size of Middlesex South, but Howe says the registry also has one-third the employees and one-third the budget – which has been very difficult to handle. "A few years ago, we had 36 employees but now, through attrition and no new hiring, we're down to 24. We ration long distance phone calls and postage. Office supplies are running low. Yet we're recording more documents (of greater length) than ever before," he said.

Howe credits the Middlesex North registry's smooth operations to two things. "First, management and union employees have a very good relationship - everyone has bought into the idea that serving the customer is our top priority. Second, when the worst budget cuts arrived in November 2001, we made some pretty radical changes in the way we operated - not paying for postage for the return of documents, halting the production of printed record books (relying on scanned images with microfilm backup), and a number of other cost saving measures. By providing just the essential services to our customers quickly and efficiently, we were able to dispense with the non-essential, even though much of what we cut was considered untouchable," he said.

Middlesex North was also the first registry in Massachusetts to install the new statewide "standard registry of deeds computer application" provided by a company called ACS. An existing information technology bond provided the funding for this system, which went online in the registry in July 2002 (to view the system go to www.lowelldeeds.com). According to Howe, the new system – which places all of the computerized information on the Internet – has helped streamline and speed up operations. Middlesex South as well as Worcester, Hampshire and Franklin counties will receive this same system over the next 18 months.

Solutions

Ed Krug, president and general counsel for the Title/Appraisal Vendor Management Association (TAVMA) and president of Aliquippa, Pa.-based Servicelink, commented that the problem in Massachusetts may prompt more people to wonder if the time has come for the establishment of a national recording office. "This would eliminate the problems most registries are facing with uniformity and technology difficulties," he said.

In the meantime, many predict the long lines and short tempers at the Massachusetts registries will stick around for a while – especially since the budget was effective July 1, and the commonwealth is already several months into the fiscal year. "Unless a supplemental budget is passed to increase the amount of money to the registries or the secretary of state frees up some money from another account, it will continue to be a problem until next fiscal year," forecasted Dillingham.

And, unless the funding improves, Howe anticipates that the service his registry provides will start to erode. "Technology has allowed us to handle incredibly high volumes with a lot less employees. But technology becomes obsolete very quickly. You must maintain it and upgrade it to have it perform well. Right now, we don't have the money to do that," he said.

Buckley said it would make sense for registries in other counties to follow suit with Plymouth and open satellite offices. "But that's if they could even get the funding," he said. "However, it still wouldn't fix the staffing troubles."

In order to help out the situation, some title companies are offering gap coverage for refis in Massachusetts, Baghdady said. "There is a three day right of rescission in Massachusetts, so if the agent is not able to get on record once the right of rescission expires because of a registry problem, the gap coverage allows the attorney to disburse the loan proceeds and provide title insurance to the lender anyway," he said.

But the rub with gap coverage is that it only masks the problem. "It makes it look as though the system is working, and if it looks like its working, no one will try to fix it," Baghdady said. "While it may be good from the borrower's prospective, it gives the wrong perception to politicians who affect the budget and makes it look like the problem is not so bad."

Baghdady sees only one immediate fix to the horror show currently playing in the Massachusetts registries. "Contact the state representative, the governor, secretary of state and voice your concerns on the impact the budget cuts are having on the operations of the registries," Baghdady offered. "We need people to lobby to get some of that funding restored."

Published: December 10, 2002

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