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By Colin A. Young

STATE HOUSE, BOSTON, SEPT. 26, 2017.....The chain of custody in mortgages can often be difficult to follow, leading to confusion and stress for homeowners. Registers of deeds and a lawmaker on Tuesday pitched the Judiciary Committee on requiring all residential mortgage assignments be recorded so a homeowner can track who is holding their mortgage.

"For most homeowners, purchasing a property is the biggest investment they'll make in their lifetime, it may also be their biggest financial obligation as well," Bill O'Donnell, the register of deeds for Norfolk County, said. "Both of these bills would guarantee greater transparency to a homeowner when their mortgage is transferred to a third party."

O'Donnell spoke in support of legislation (S 880/H 790) filed by Sen. John Keenan and Rep. William Galvin to mandate the forwarding of all residential mortgage assignments to the appropriate registry district for recording. As written, the bill calls for any mortgage assignment to be recorded within 30 days, though supporters said they would be amenable to a different deadline.

"This is a consumer bill," Plymouth County Register of Deeds John Buckley told the Judiciary Committee. "The way we look at it, people pay $175 to record a mortgage, they ought to know who holds it as it goes forward."

Requiring that residential mortgage assignments be recorded, Keenan said, homeowners will be better able to protect themselves from scams and have more control over their finances.

"Homeowners should have a clear understanding of who it is that holds the mortgage. That is not only beneficial when it comes time to sell the house, but oftentimes they've received notices -- sometimes unsolicited -- that their mortgage may have been assigned and it's a scam," Keenan said. "Without knowing exactly who holds the mortgage, they may be more susceptible to those types of frauds."

Opposition Tuesday came from the parent company of Mortgage Electronic Registrations Systems Inc., which oversees the electronic mortgage registry known as the MERS system.

"The rationale seems to be that there is a lack of transparency. Since 2009 and 10, federal law requires that every time a loan is transferred ... notices go to the homeowner. If for some reason they lose that notice, in 2010 the Dodd-Frank bill requires that if a homeowner asks a servicer, 'who is the investor in this loan?' they have 30 days to tell the homeowner," William Hultman, vice president of legislative affairs at MERSCORP Holdings, Inc., said, adding that MERS provides free access to its records. "The idea that there is a lack of transparency...going to the land records is not necessarily the easiest way to get that information, but the federal government has provided a remedy and MERS helps in getting that information."

Hultman also said the bill could increase costs to homeowners as banks and lending companies try to comply with the new requirements.

Rep. Sheila Harrington, a Groton Republican, said she thinks the bill is a great idea, but asked O'Donnell and Buckley what the penalty would be if a mortgage assignment is not recorded.

"I know there are other bills that have some teeth out there," O'Donnell said. "I'll be the first one to say our bill doesn't have teeth as far as punishment because we haven't been able to get this bill through with no punishment, never mind making a punishment for not recording it."

When the Legislature passed a bill in 2015 to limit property title challenges to a three-year window going forward, Keenan argued unsuccessfully in the Senate for an amendment that would have required notification to the Registry of Deeds as mortgage assignments change.


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