Documents awaiting processing by data entry workers line the corridors at the Suffolk County Registry of Deeds in Boston.
Part One of a Two-Part Series
Faced with a shrinking budget, Irene M. Skorput, like so many other state workers, has had to figure out ways to save money.
The register of deeds at the Berkshire Southern District office, Skorput has seen her budget drop more than 18 percent, from $250,000 to $204,000 during this fiscal year, forcing her to cut back on even small things like phone usage and copier expenses.
And despite a proposal by Gov. Mitt Romney last week to hike various registry fees and add a $5 surcharge for every transaction recorded at the registries, the immediate relief that the cash-strapped registry officials are seeking doesn’t seem to be forthcoming.
“To operate the registries professionally and efficiently you need staffing,” said Skorput, explaining why long lines and delays are occurring at the registry offices.
In Skorput’s registry office, employees have stopped making phone calls and sending faxes outside of the local calling area to shave costs. When a Banker & Tradesman reporter recently called, for example, a registry employee instructed the reporter to call back because the office didn’t have money to make non-local phone calls.
Employees won’t even call or fax Pittsfield, one of the region’s major cities that’s roughly 10 miles from the registry office in Great Barrington. When consumers want documents, they have to send in a self-addressed stamped volume or come to the office in person.
Besides saving on phone bills, Skorput found that the registry could save money by leasing the copy machine that’s located in her office. Now the money that’s collected for copies no longer goes into the state coffers.
“I couldn’t afford to buy the paper or the toner,” explained Skorput.
The Berkshire registry is by no means the busiest in the state and hasn’t been the hardest hit by the budget cuts. Employees at busier registries, like the Middlesex Southern District Registry in Cambridge, report there are boxes of unprocessed mail and long lines of people waiting to get documents like property deeds, homestead exemptions and refinancing documents recorded.
The reduction in budgets and staff size has come as registries are handling hundreds of thousands more transactions because of the boom in mortgage refinancings and home sales in this state. In other words, the state’s registers say they have been forced to do more work with less money and fewer employees.
More than a mere inconvenience, the registry backlogs have forced consumers, closing attorneys and title insurers to assume more risk and higher costs during various real estate transactions like a home refinancing, according to sources interviewed by Banker & Tradesman. If the delays continue, some homeowners who refinance will have to pay hundreds of dollars in extra interest because documents aren’t recorded when expected.
In some cases, closing attorneys are charging more to complete transactions by tacking on extra per diem charges – fees about which borrowers and sellers aren’t always aware – because there’s no guarantee that a transaction will be recorded by a specific time, said a local real estate attorney.
Like many other state departments and agencies, the registries starting feeling the pinch back in 2001 when lawmakers began making cuts because of a state budget shortfall. Some registries weren’t allowed to replace retired employees. Others ran out of money for basics like postage or paper.
To avoid laying off workers, one registry instead opted to slim employees’ five-day workweeks to four days. Some registries also capped the number of documents an individual can record at any one time.
Take a Number
At the Middlesex Southern District Registry of Deeds in Cambridge, which is the busiest in the state, the registry can’t handle the daily volume of transactions, according to officials. Eugene C. Brune, register of deeds in Cambridge, estimates that the registry gets about 5,500 transactions waiting to be recorded each day, but at the most the registry can record only about 2,000.
“If I don’t have any money for staff and overtime, what you see today you’re going to see 10 years from now,” said Brune.
Brune’s budget has been slashed by more than $400,000 during the last three years, from $3.7 million to $3.3 million, and the registry has lost 15 employees, according to information provided by the Secretary of State’s Office.
But during that time, the Cambridge registry has also brought in 50 percent more revenue for the state while recording thousands of new documents. According to the Secretary of State’s Office, the registry is pulling in $70 million, compared to $45 million three years ago, and recording 420,000 documents – 130,000 more than in 2000.
The commonwealth’s four busiest registries – in Boston, Cambridge, Salem and Worcester – are expected to collect about $160 million for the state in fiscal year 2003. The operating budgets for those four registries combined is $9.5 million. The state runs 13 of the 21 registries in Massachusetts, with eight others still under county control.
“I receive about 3,000 to 4,000 pieces of mail a week,” said Brune, adding that one piece of mail can contain several documents.
Brune said there is about two months’ worth of mail to be processed, containing over $2 million worth of checks for registry fees. Even attempts to catch up on mail by having employees work overtime on several Saturdays weren’t very fruitful.
While workers might have processed 1,500 pieces of mail on a Saturday, Monday would bring in another 1,800 pieces of mail, Brune said. To deal with the mail, Brune said he devised a system where mail is opened and sorted into three piles, with priority going to sales, liens and homestead exemptions. Mail with mortgages and assignment of mortgages must wait.
Attorneys and others actually showing up to the Cambridge registry describe the frustration of having to wait for hours in long lines. Brune said he was forced to start giving people numbers to keep them from standing outside on bitter cold mornings waiting for the doors to open. The numbering system – which goes up to 99 – had to be changed into a number and color-coded system because more than 100 numbers were being distributed each day. The registry also has a separate line for people with only one document to record.
Appraising the Situation
At the Suffolk County Registry of Deeds in Boston, workers have had to be shifted around to take care of the most pressing crisis of the moment, explained James C. Doyle Jr., the assistant register of deeds who served as acting register before Francis “Mickey” Roache took over this year.
Back in 1999, the Boston registry had 57 employees, two of whom were part-time, said Kevin Kinsella, a longtime employee who is in charge of information technology at the registry. The registry now has about 39 employees, four of whom are part-time. Four employees retired and were never replaced. On any given day, an average of seven employees are out because of illness or vacations, explained Kinsella.
The Boston registry is recording about 260,000 documents, up from the 170,000 documents three years ago, according to the Secretary of State’s Office. The registry is working with a $2 million budget but is expected to pour $38 million into the state’s coffers this fiscal year.
Last week, the Suffolk Registry’s hallways were filled with dozens of boxes packed with recorded documents dating back to October that data entry workers had yet to process. There were also dozens of boxes stacked in a hallway filled with original documents with self-addressed and stamped envelopes that had to be mailed back to lawyers and lenders.
The delays in getting documents, like home sales transactions, entered into the computer system are creating problems for appraisers and companies like The Warren Group, who use the registry data.
The Warren Group, the parent company of Banker & Tradesman, pays the registries for the data and publishes the information in bound monthly reports, an online database and other publications, which are then sold to Realtors, real estate appraisers and others who follow the industry. Banker & Tradesman also prints the transaction information each week in its Official Records section.
At present, Suffolk County has been able to provide statistics to the company for documents recorded through September of last year.
“Our objective is to publish all deeds and mortgages within 30 days of their recording … at the registry of deeds,” said Timothy Warren Jr., president and publisher of The Warren Group. “So when we don’t meet that, I think our readers feel as though they don’t have access to the most recent data.”
Certified real estate appraisers like Lorrie Beaumont of Westwood acknowledge that the old registry data can be a hassle, especially for diligent appraisers who want to verify recent sales prices that they’ve either seen or heard about from real estate agents by checking records online at The Warren Group or registry Web sites.
“It creates more work for us,” said Beaumont. Appraisers need the most recent sales information, especially in a real estate market where values are quickly appreciating or depreciating, she said. Most lenders want to see analyses based on home sales within the last six months, said Beaumont.
Lenders want the most recent data available and might ask appraisers to go back and verify information or use more recent sales in their analyses, she said. But Beaumont explained that most appraisers and lenders typically accept sales comparisons based on information provided by real estate agents or the multiple listing services.
Attorneys and title insurers have also been feeling the squeeze because of the registry backups. One attorney who is active with the Massachusetts Conveyancers Association, the association representing real estate lawyers, said that much of the additional cost is being absorbed by closing attorneys and title insurers who have helped consumers by providing title insurance gap coverage on demand for residential refinances, so that the transactions can take place. That type of insurance coverage basically covers the “gap” that occurs between the date through which the last title examination was made and the date of the recording of the insured’s deed or mortgage.
One particular title insurance company has extended its gap coverage for refinancings from about eight days to 21 days because of the registry delays.
Groups like the MCA and the Massachusetts Bankers Association have met with registers to discuss the problems. Last week, Romney proposed one way of possibly funneling more money to the registries.
Romney wants to increase the fees that people pay to file deeds, mortgages and homestead exemptions. However, the fees that are collected, some of which haven’t been increased for more than two decades, go into the state’s general fund and not necessarily to the registries themselves. Under the Romney bill, the fees would be increased from $45 to $100 for deeds and $10 to $30 for a homestead declaration. For mortgages, the flat fee of $40 that is now charged would be changed to $25 for the first page and $7 for each additional page. The increases could generate $200 million annually, according to an estimate from the governor’s office.
Romney also wants to tack on a $5 surcharge for all documents. The surcharge would be earmarked specifically for technological improvements at the registries. The state already tacks on a $20 surcharge on all documents to fund the Community Preservation Act. That money goes into a fund that was established in 2001 to give to communities for affordable housing, historic preservation and open space acquisition and maintenance.
Romney’s bill was sent to the House Judiciary Committee, which as of last Friday had not set a date for a hearing to discuss the issue.
Next week: Part two of this series examines potential solutions to the ongoing difficulties at the state’s registries of deeds.
