Title Insurance Report
Forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder's office; a misapplied tax payment: these are but a few of the hidden "title effects" that could cause you to lose our property. And, even if you don't lose your property altogether, title problems could make it impossible for you to sell or even give it away.
You don't want a problem that occurred long before you bought your property to deprive you of ownership or your right to use or dispose of it. And you don't want to pay the potentially ruinous cost of defending your property rights in court. A title insurance policy is the best protection against potential defects which could remain hidden despite the most thorough search of public records.
Protect yourself against such potential defects as:
- Forged deeds, mortgages, satisfactions or releases
- Deed by person who is insane or mentally incompetent
- Deed from partnership, unauthorized under partnership agreement
- Deed to or from a "corporation" before incorporation, or after loss of corporate charter
- Deed from a legal nonentity (styled, for example, as a church, charity or club)
- Claims resulting from use of "alias" or fictitious namestyle by a predecessor in title
- Deed following nonjudicial foreclosure, where required procedure was not followed
- Deed following judicial proceedings, where all necessary parties were not joined
- Deed executed under falsified power of attorney
- Deed following administration of estate of missing person, who later reappears
- Deed to land including "wetlands" subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing and recreation).
- Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
- Deed recorded, but not properly indexed so as to be locatable in the land records
- Undisclosed but recorded notice of pending lawsuit affecting land
- Errors in tax records (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property).
- Misinterpretation of wills, deeds and other instruments
- Deed to land without a right of access to a public street or land
- Deed not properly recorded (wrong county, missing pages or other consents, or without required payment) etc.
There are important differences between Lender's Title Insurance (which your Lender will require you to purchase) and Owner's Title Insurance which insures your equity in the property against claims by others (optional at time of purchase).
Please call us to discuss the importance of Title Insurance and the differences in policy coverage.
Homestead Protection Guide for Massachusetts
The Homestead Act
Questions & Answers
Massachusetts General Laws, Ch. 188, §1-10
What is a Declaration of Homestead/Homestead Protection?
An Estate of Homestead is a type of protection for a person's residence, in the form of a document called a "Declaration of Estate of Homestead". The form is filed at the Registry of Deeds in the county where the property is located, referencing the title/deed to the property. It allows homeowners in Massachusetts to protect their property up to five hundred thousand dollars ($500,000)* of the value per residence, per family.
* Existing homesteads will get the increased protection automatically after October 26, 2004.
Where do I file my Homestead?
All Homesteads must be filed in the county in which the residence is located. To acquire a claim of Homestead for a mobile home, you must file at the city or town clerk's office in the city or town in which the mobile home is located. Be sure the form is filled out completely and has been properly notarized, and remember to enclose a check for the proper recording fee with the Homestead form. The check should be made payable to the Commonwealth of Massachusetts. Homestead forms may be obtained at most Registries of Deeds. They are also available at legal stationery stores or your local attorney's office.
How am I protected?
The real property or manufactured home which serves as an individual's principal residence upon filing a declaration of Homestead, shall be protected against subsequent attachment, levy on execution or sale to satisfy debts to the extent of five hundred thousand dollars ($500,000) per residence, per family.
The statute further states that "For the purposes of this Chapter, the word 'family' shall include either a parent and a child or children, a husband and wife and their children, if any, or a sole owner". Thus, a single person who is the sole owner of a primary residence may file for a Homestead protection to the extent of five hundred thousand dollars ($500,000).
How am I protected if I am 62 or older, or disabled?
The real property or manufactured homes of persons sixty-two (62) years of age or older, regardless of marital status, or of a disabled person or persons, regardless of age, shall be protected against subsequent attachment, seizure or execution of judgment to the extent of five hundred thousand dollars ($500,000) each.
Real property or manufactured homes must serve as an individual's principal residence and each individual filing will be eligible for protection up to a maximum amount of five hundred thousand dollars ($500,000) each regardless of whether such declaration is filed individually or jointly with another. Elderly persons filing jointly, regardless of marital status, will be exempt up to five hundred thousand dollars ($500,000) each. Be sure to use the proper homestead form when you file.
What does the Homestead Law mean by a "disabled person"?
A disabled person is defined as an individual who has any medically determinable permanent physical or mental impairment which would meet the disability requirement of supplemental social security. You must attach to the Homestead form either the original or a certified copy of the award letter issued by the United States Social Security Administration, or a letter signed by a licensed physician registered with the Massachusetts Board of Registration in Medicine. Disabled persons must meet the disability requirements stated in 42 USC 1382 (a) (3) (A) and (C). Basically, an individual is considered disabled - for the purpose of this law - if he or she cannot engage in any gainful activity as a result of the physical or mental impairment.
Are my spouse and children covered, should I pass away?
Yes. Should the parent who declares the Homestead die, the law protects the residence until the youngest unmarried child reaches the age of eighteen (18) and until the surviving spouse dies or remarries.
If I am over 62 and my spouse is under 62, should we both file?
No. The law states that only one spouse under 62 years of age can file a Homestead under Section 1 on behalf of themselves and his or her family. However, for elderly and disabled individuals, the protection of $500,000 under Section 1A is for each person's ownership interest in the residence. If a non-elderly homestead exemption already exists and one of the spouses reaches the age of 62, it would seem to be beneficial to have that person file an over 62 (elderly) homestead. However, because of a recent Bankruptcy Court decision, it would be safer for both parties to continue to claim the protection afforded by the traditional (under age 62) homestead. This is because Section 2 of Chapter 188 states "The acquisition of a new estate or claim of homestead shall defeat and discharge any such previous estate". That means that the filing of an elderly homestead by either spouse would rescind the under age 62 homestead and open up the claim period for previous creditors. It would be better to wait until both spouses reach 62 and then file a joint elderly homestead. In all cases, you may want to consult an attorney.
Will my Homestead Declaration protect my home from being taken if I go into a nursing home?
Liens imposed by the Massachusetts Department of Public Welfare, as a result of the payment of Medicaid benefits, are exempt from the Homestead protection. However, as of the printing of this pamphlet, as long as the recipient, or the spouse of the recipient, is alive, the Commonwealth will not look to the residence for reimbursement of Medicaid benefits. If the surviving spouse is also the recipient of Medicaid benefits, the Commonwealth will file a claim for reimbursement from the estate for the entire amount of Medicaid benefits paid, once the surviving recipient has died. The rules and regulations regarding Medicaid are complicated and constantly changing. You should seek competent counsel to address your specific concerns regarding Medicaid.
Is there anything I will not be protected from?
The following are exempt from the Homestead Law:
? federal, state and local taxes, assessments, claims, and liens;
? mortgages used to purchase the residence, and in the case of the elderly homestead, first and second mortgages held by financial institutions or others;
? an execution issued from the Probate Court to enforce its judgment that a spouse pay for the support of a spouse or minor children;
? where buildings on land not owned by the owner of a Homestead estate are attached, levied upon or sold for the ground rent of the lot whereon they stand;
? upon an execution issued from a court of competent jurisdiction to enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity;
? debts contracted prior to the acquisition of the homestead.
Can (a) trustee(s) file for home Homestead protection?
Massachusetts Supreme Judicial Court has determined that registered land held in trust cannot be given Homestead protection. The case did not address recorded land. Until there is court clarification, we suggest you record a Homestead, even if your property is in trust and is not registered land.
What happens to my Homestead if I should re-mortgage or take out a second mortgage or home equity loan?
Existing law on the effect of refinancing on an existing homestead is unclear. If you are in this situation, you should ask your lawyer whether you should file a new homestead after refinancing.
If I divide my time equally between my winter and summer residences, can I declare a Homestead on both?
No. A Homestead can be declared only on an applicant's "principal residence". A person can have more than one residence but the statute only allows the protection on one's legal domicile. There is no legislative intent to allow the exemption to apply to a vacation and not primary residence. For example, a husband cannot declare a Homestead exemption on one residence while the wife declares the exemption on the other residence, unless each can prove that the residence is their "principal residence".
Does the Homestead protection take the place of home insurance?
Absolutely not! The Homestead protection is not a substitute for home insurance or any other type of liability insurance. These are separate and distinct types of protection. The Homestead protection will be effective after any liability insurance is used to pay for any judgments that are related to liability incurred under that particular insurance policy (e.g. home, automobile, etc.)
How does the Homestead Declaration help protect a home against unsecured creditors in bankruptcy proceedings?
Remember that the Homestead Declaration protects a homeowner only from unsecured creditors. It will not offer protection from first or second mortgage lenders and/or equity lenders who possess a security interest in a home. If payments are not current on these types of secured credit, a homeowner runs the risk of losing the home to foreclosure proceedings.
In a Chapter 7 bankruptcy, which is an asset liquidation proceeding, a homeowner is allowed to claim certain exemptions which function as asset protection allowances. If a Homestead Declaration is in place, and the state exemptions are claimed, a homeowner would be allowed to retain a much greater portion of the proceeds from a liquidations sale of the home than s/he would be allowed to keep under federal bankruptcy law exemptions. This factor in turn decreases (or eliminates) the possibility that the homeowner would be required to sell his/her home as part of Chapter 7 proceedings.
In all Chapter 13 bankruptcy proceedings, the court will require a homeowner to repay some or all of the unsecured debt over a three- to five-year period. You will be required to repay a percentage of that debt at least equal to that which the unsecured creditors would receive were a homeowner required to proceed under Chapter 7 liquidation regulations. By increasing the amount of the home's exemption, the Homestead Declaration decreases the proceeds which would become available for repaying unsecured creditors through the Chapter 7 alternative. This may decrease the percentage of the unsecured debt the homeowner would be required to repay through a Chapter 13 proposal.
Where can additional information be obtained about bankruptcy issues as they apply to Homestead protection?
This information can be discussed with qualified counselors from the Consumer Credit Counseling Service, a private non-profit agency with chapters nationwide. In MA, contact the Consumer Credit Counseling Service of Southern New England at: 1-800-208-2227.
Is the Homestead form difficult to understand and fill out?
No. It simply asks for basic information. Just be careful when writing your book and page number or your Certificate of Title number. Both are shown on your deed.
Can my Homestead be terminated?
The estate or claim of Homestead will be terminated upon the sale or transfer of the real property or mobile home during the declarant's lifetime, upon the death of the declarant and the remarriage of the declarant's surviving spouse and upon each child reaching the age of majority or by a release of the Homestead estate duly signed, sealed, and acknowledged by the owner and the owner's spouse, if any, and recorded at the Registry of Deeds, or when the property ceases to be the principal residence. In addition, the Bankruptcy Court has ruled that the filing of a sequential declaration of homestead acts to discharge a prior declaration.
Free dictionary'Glossary of common Real estate terms
Glossary of Terminology
Adjustable or Variable Rate Mortgage (ARM or VRM) - a mortgage loan in which the interest rate varies in accordance with changes in a specified index, and may reesult in changed monthly payments.
Adverse Action - a denial of a loan in an amount and on terms acceptable to the borrower.
Annual Percentage Rate (APR) - the actual cost of credit to the borrower, including interest and certain other charges, expressed as a yearly rate and calculated over the life of the loan.
Application - an oral or written request for an extension of credit. Usually a pritned form on which the lender collects credit, income and debt information about a prospective borrower, plus facts about the property being used to secure the loan. A fee may be charged at the time of application.
Appraisal - an inspection of the property to assure that its market value exceeds the amount of the loan. A fee may be charged for the appraisal.
Assignment of Mortgage - passes a mortgage from one institution to another.
Borrower - the person, sometimes referred to as the mortgagor, who obtains a mortgage loan.
Closing - the time and date set for the transfer of the property from seller to buyer and/or for the signing of the loan documents.
Closing or Settlement Costs - fees, in addition to the purchase price of the property, charged at closing which include but are not limited to lawyer's fees, title search and insurance, survey charges, and fees to record the deed, mortgage, and other documents.
Commitment Letter - lender's written offer to grant a mortgage loan outlining the terms, the amount of the loan, the interest rate and any other conditions. It can also serve as a communication of the lender's decision on the borrower's application.
Counter-Offer - an offer made by the lender to grant credit other than in the amount or terms requested by the applicant.
Discharge or Satisfaction of Mortgage - legally takes a mortgage lien of the property. States that the mortgage note has been paid in full.
Equal Credit Opportunity Act - federal and state laws that prohibit discrimination in the granting of credit based on race, color, religion, national origin, sex, marital status, age or whether a person is receiving public assistance or alimony.
Escrow Account - money collected in advance by the lender, usually on a monthly basis, for the payment of real estate taxes, betterments and/or insurance.
Fixed Rate Mortgage - a conventional mortgage loan with a set interest rate and equal monthly payments for the entire term of the loan.
Home Equity Credit Line - second mortgage; pay off credit bills and consolidate other bills.
Lender - the entity or person, sometimes referred to as the mortgagee, who offers the mortgage loan.
Lien - a legal claim, granted by contract or by court, against property. A mortgage is one kind of lien.
Loan-to-Value Ratio - the percentage comparison between the unpaid principal balance of the mortgage and the sales price or the appraised value of the property, whichever is lower.
Mortgage - a lien placed by the lender on the borrower's property and removed when the note has been paid in full. If the borrower defaults on the note, the lender can sell the property to satisfy the debt.
Mortgage Review Board - a voluntary board consisting of an equal number of lenders and community representatives who will review the residential mortgage loans denied by participating lenders where the applicants believe the denial was based on the location of the property.
Note - the borrower's legally binding written promise to repay a debt to a lender on a specified date.
Point - an often non-refundable sum of money, equal to one percent of the principal amount of a mortgage, charged by the lender to cover certain costs of making a loan. The number of points that may be charged may be limited by law.
Private Mortgage Insurance - protection for lenders against borrower default. Paid for by the borrower and usually required when the down payment is less than 20 percent of the purchase price.
Rate-Lock Agreement / Interest Rate Commitment - a written agreement by which a lender will hold an interest rate on a mortgage for a specified period of time. The terms and conditions of a rate lock agreement vary from lender to lender.
(RESPA) Real Estate Settlement Procedures Act - a federal law that requires a good faith estimate of closing costs required to be given on certain first mortgages.
Right of Rescission - state and federal laws that allow consumers who refinance first mortgages and certain second mortgages to cancel their contract and receive a refund of all fees. This must take place within three business days following the closing, or following the delivery of the required information and rescission forms and disclosures, whichever occurs last.
Secondary Mortgage Market - investors who purchase residential mortgages originated by lenders.
Title Insurance - protection against loss due to defects in the title that were not uncovered in the title search and not listed in the title report. Both the lender and the borrower may purchase title insurance to protect their own interests.
Title Search - an examination of legal records to check the validity and completeness of the title to the property. The title search should uncover any liens, overdue assessments or other claims against the property.
Truth-in-Lending - federal and state laws that require lender to provide borrowers with full disclosure of the true cost of a loan and easy-to-understand information about the annual percentage rate and terms of the loan.
Urea Formaldehyde Foam Insulation (UFFI) Notice - some state laws may require a borrower or seller to disclose to a lender the absence or presence of UFFI and the formaldehyde level in a dwelling.
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