From the President

Hard winter before gentle spring
The NREIS Case Continues
By Christopher Pitt

As I write this the week before the start of the New Year and the start of my year as REBA’s president, the unusually balmy temperatures outside feel like spring in New England. But we Bay Staters know that before the spring will inevitably come a cold and sometimes uncomfortable winter. No way around it. Today, REBA still feels the warmth of its favorable decision of last spring from the SJC in the NREIS (case, a major step forward in our fight against the unauthorized practice of law in Massachusetts. But just as a blustery winter is sure to be around the corner, here at REBA we look ahead to what is likely to be a turbulent and challenging year.

The foreclosure crisis presents a series of challenges for REBA. After a long run-up, the foreclosure-related bills working their way through the legislature are focused primarily on the ongoing relations between lenders and delinquent borrowers, finding ways to prevent consumers from losing their homes while increasing the level of fairness in the mortgage process. REBA has no vested interest in a particular legislative outcome, except to ensure that any new legislation result in a system that works. REBA’s experienced Legislation Committee and our Legislative Counsel Ed Smith monitors all pending bills to insure that REBA’s voice is heard.

However, the current legislative focus on some form of borrower/lender mediation and the Attorney General’s well-publicized lawsuit looking to tag the largest lenders with blame for some portion of the mess both overlook a potentially crippling title crisis. This problem has resulted from a decade of inattention in the mortgage industry to the level of detail that has been the hallmark of Massachusetts conveyancing practice for more than a century. The Supreme Judicial Court’s decisions in Ibanez and Bevilacqua have identified the failures but have done little to help resolve the resulting title issues. As this column is written, we are again holding our collective breaths waiting for the decision from the SJC in Eaton addressing whether the lender must now demonstrate physical possession of the note in order to conduct a valid foreclosure.

No one knows how many titles are affected statewide, but the number is likely in the thousands. In many cases, because of bank mergers and failures, as well as administrative negligence, original loan documentation – including promissory notes – may never be found. Inaction is not an option. It is both unjust and a serous drain on our already faltering economy to leave these tainted properties in indefinite marketability limbo. A solution must be found to cure these defective titles. REBA must be a part of that solution.

REBA must also redirect its attention to the NREIS litigation. Despite a solid victory before the SJC, the fight is far from over. Back before the First Circuit this fall, NREIS would not even agree in mediation to a listing of those elements of conveyancing that are or are not the practice of law. Consequently the case has been remanded to the Federal District Court and now may enter an additional discover phase in preparation for trial. This is likely to be a long, costly and tedious process, requiring our persistence and resolve. But REBA must prevail in this all-important fight for our members, the bar, and the home-buying citizens of the commonwealth.

An essential element in REBA’s ongoing war against the unauthorized practice of law (UPL) is the work of Massachusetts Attorney’s Title Group (MassATG). MassATG, launched in 2008 as a nonprofit corporation, to support the funding of REBA’s litigation on the practice of law by non-lawyers front. Since its inception, MassATG has donated $130,000 to support REBA’s efforts in the  NREIS litigation. Our member dues and other sources of revenue (including REBA Dispute Resolution) cannot alone cover the cost of this litigation and other UPL initiatives. The ongoing success and growth of MassATG is crucial to this element of REBA’s core mission.

When a title insurance policy is issued by CATIC through MassATG, a portion of the premium goes directly to fund REBA’s UPL efforts. As the battle continues on a variety of fronts, our war chest must be refreshed. Every member’s participation is essential to this effort. Become a MassATG agent today. REBA neither asks nor expects that you issue policies exclusively with MassATG, though of course that would be appreciated. We know that the real estate market remains sluggish. For many conveyancers transactions are few and far between. We also recognize you have existing and long-standing relationships with other underwriters. But if every REBA conveyancer were to become a MassATG agent and issue a single policy each year with CATIC through this group, the ongoing legal expenses of the NREIS litigation would be met and the funding of future initiatives guaranteed.

Become a MassATG issuing agent today and you will have personally advanced REBA’s essential work on behalf of the Massachusetts real estate community and the home-buying public.

 
Chris Pitt is an attorney at Robinson & Cole, LLP in Boston, and is the 2012 president of the Real Estate Bar Association for Massachusetts. He can be reached at cpitt@rc.com.