Buying and Selling a Home

CHAPTER 3

Ruth A. Dillingham, Esq. First American Title Insurance Company, Yarmouthport

§ 3.1 Introduction ...... 3–1

§ 3.2 Initial Consultation ...... 3–1 § 3.2.1 Documents to Have at the Initial Interview ...... 3–2 § 3.2.2 The Seller Client ...... 3–3 § 3.2.3 The Buyer Client ...... 3–4

§ 3.3 Negotiating the Purchase and Sale Agreement and Preclosing Matters ...... 3–5 § 3.3.1 General Concerns ...... 3–5 § 3.3.2 Specific Items ...... 3–5 (a) Multifamily Dwellings ...... 3–9 (b) Condominiums ...... 3–9 (c) Financing Concerns ...... 3–9

§ 3.4 Awaiting the Closing ...... 3–10 § 3.4.1 General Communication ...... 3–11 § 3.4.2 Financing Concerns ...... 3–11 § 3.4.3 The “Bank” Attorney ...... 3–11 § 3.4.4 Title Problems ...... 3–12 § 3.4.5 The Seller’s Attorney ...... 3–13 § 3.4.6 The Buyer’s Attorney ...... 3–13 § 3.4.7 The “Figures” ...... 3–14 § 3.4.8 Other Issues ...... 3–14

§ 3.5 The Closing...... 3–14 § 3.5.1 Preparation ...... 3–14 § 3.5.2 Actual Closing Procedure ...... 3–15

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CHECKLIST 3.1—Environmental Review—Residential Property ... 3–16

CHECKLIST 3.2—Closing ...... 3–18 CHECKLIST 3.3—General Tips on Developing a Residential Real Estate Practice ...... 3–20

EXHIBIT 3A—Offer to Purchase ...... 3–21 EXHIBIT 3B—Sample Information Form for Initial Client Telephone Call ...... 3–22

EXHIBIT 3C—Lead Paint Notification Certificate ...... 3–24

EXHIBIT 3D—Purchase and Sale Agreement ...... 3–25

EXHIBIT 3E—Time Extension Agreement ...... 3–31 EXHIBIT 3F—Standard Form Condominium Purchase and Sale Agreement ...... 3–32

EXHIBIT 3G—Loan Estimate ...... 3–36

EXHIBIT 3H—Closing Disclosure ...... 3–39

EXHIBIT 3I—Buyer’s Adjustment Form ...... 3–44

EXHIBIT 3J—Seller’s Adjustment Form ...... 3–45

EXHIBIT 3K—Deed ...... 3–46

EXHIBIT 3L—Note ...... 3–48

EXHIBIT 3M—Mortgage ...... 3–51

EXHIBIT 3N—Adjustable Rate Note ...... 3–68

EXHIBIT 3O—ARM Rider to Mortgage ...... 3–72

EXHIBIT 3P—Condominium Rider to Mortgage ...... 3–75

EXHIBIT 3Q—One- to Four-Family Rider to Mortgage ...... 3–77

EXHIBIT 3R—Second Home Rider to Mortgage ...... 3–79

EXHIBIT 3S—Plot Plan ...... 3–80

EXHIBIT 3T—Attorney’s Certification of Title ...... 3–81

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EXHIBIT 3U—Municipal Lien Certificate ...... 3–83

EXHIBIT 3V—Lead Paint Agreement ...... 3–84

EXHIBIT 3W—Smoke Detector Notice ...... 3–85

EXHIBIT 3X—Seller’s Title Insurance Affidavit ...... 3–86

EXHIBIT 3Y—IRS Form W-9 ...... 3–87

EXHIBIT 3Z—IRS Form 1099-S and Instructions ...... 3–91

EXHIBIT 3AA—IRS Nonforeign Affidavit ...... 3–98

EXHIBIT 3BB—UFFI Certificate ...... 3–99

EXHIBIT 3CC—Rescission Notice ...... 3–100

EXHIBIT 3DD—Ten Frequently Asked Questions ...... 3–102

EXHIBIT 3EE—Bibliography ...... 3–105

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3–iv 6th Edition 2017 | MCLE, Inc. CHAPTER 3 Buying and Selling a Home

Ruth A. Dillingham, Esq. First American Title Insurance Company, Yarmouthport

Scope Note This chapter provides an overview of the steps involved in buying and selling residential real estate in Massachusetts. It begins with a discussion of the initial client consultation, focusing separately on the needs of buyers and sellers. It then addresses the purchase and sale agreement and preparations for the closing. The chapter concludes with a review of the closing process and some general guidance on maintaining an effective residential real estate practice. Exhibits include sample forms and checklists as well as answers to clients’ frequently asked questions.

§ 3.1 INTRODUCTION The following discussion provides an overview of the main considerations in representing the buyer or seller of a principal residence, including brief references to the concerns unique to a one- to four-family house or condominium. While all sales have some factors in common, this discussion is not of general real estate law, and practitioners seeking to represent a lender, builder, or developer or handle the sale of va- cant land should consult other sources for authority respecting those types of real estate transactions.

The sale of a residence has three phases: • the initial consultation, • negotiation of the purchase and sale agreement and advice to the client prior to closing, and • the closing.

§ 3.2 INITIAL CONSULTATION While all lawyers advise their clients not to sign anything that has not been reviewed by an attorney, you will generally find that clients do not come to you until they have a signed an “offer to purchase.” If you are contacted at an earlier stage, some inserts into the offer form such as the following can be useful: • an inspection contingency; • a mortgage financing contingency;

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• document (especially condominium) review; and • a recitation that the purpose of the document is solely to memorialize certain business points and that the parties intend to be bound only by the execution of a subsequent purchase and sale agreement.

For a sample offer to purchase, see Exhibit 3A.

Practice Note The illustration set forth in Exhibit 3A uses, with permission, a form pub- lished by the Massachusetts Conveyancers Association (MCA), which is now known as the Real Estate Bar Association for Massachusetts (REBA). For a current list of REBA forms and standards, see http://www.reba.net/ page/sfmenuonly.

Even though the offer contemplates subsequent execution of a satisfactory purchase and sale agreement, once the offer is signed by all parties (offer and acceptance), it is a binding agreement. See McCarthy v. Tobin, 429 Mass. 84, 87–88 (1999). Parties desiring not to be bound by a signed offer must include language plainly stating their intention that the document be considered preliminary and nonbinding. See McCarthy v. Tobin, 429 Mass. at 88 n.3.

Assuming the usual situation and that all parties are acting in good faith under the offer, your first involvement with the transaction is turning the offer into a purchase and sale agreement. When a client calls with a signed offer, your first advice should be to collect all documents relevant to the transaction (see checklist below) and make an appointment for an initial interview on a date after the completion of inspections, but before the purchase and sale agreement must be completed.

If you do (or plan to do) much of this work, you should have a standard form readily accessible to prompt you through this initial phone call. A sample form is set forth as Exhibit 3B.

§ 3.2.1 Documents to Have at the Initial Interview The client should bring the following documents to the initial interview: • the listing or information sheet (if the client is the buyer); • the listing agreement (if the client is the seller); • the offer and addendum; • the condominium documents, if available; • information on condominium fees, real estate taxes, etc.; and • the inspection report.

When setting up the interview, pick a date and time that allows both you and the client an hour or so to fully discuss the transaction.

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At the initial interview, you must find out what your client’s interest is. If you keep in mind that people get very emotionally involved with a home, and if you do a little psychological digging initially, it will save you and the client many phone calls and the possible discovery that you are working at cross-purposes.

§ 3.2.2 The Seller Client If you are representing the sellers, you should review the transaction with them and discuss possible problems as well as your proposed solutions. The sellers should let you know of any reason they may be forced from the transaction or to abandon the deal. Some questions to discover such a problem include the following: • Are they content with the sales price? • Are other deals dependent on this transaction? • Is the sales price sufficient to pay off all liens, etc., necessary to conclude the sale? • If they are selling a condominium, are they familiar with the requirements of conventional lenders for condominium project compliance? • Have they another place set to live in? • What time constraints apply? • Who are the other parties, including brokers or attorneys? • What are the specifics of the broker’s commission? • Have the sellers made any representations to the buyers? • Has the broker made any representations to the buyers? • Have they complied with the state law requirements for lead paint and smoke and carbon monoxide detectors (see Exhibit 3C)? • Have they complied with state law requirements for inspection of any on-site disposal system? • Will there be any problems with radon, asbestos, or chlordane? • Does the property contain an in-ground oil tank (in which case the buyer or buyer’s lender may require its removal)? • What is their degree of emotional involvement? Are they likely to back out for sentimental reasons? • Are the sellers aware of any specific buyer concerns?

The following are some concerns unique to dealing with delinquencies: • A seller who is facing a mortgage loan default will probably be under pressure to close quickly and on terms amenable to the lender. • If the seller is in a difficult situation, the seller’s attorney should coordinate with the lender to determine what options are available. Some lenders hold off

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on a foreclosure sale if a binding purchase and sale agreement has been signed or once the buyer has financing. In some instances a lender may even agree to a payoff of even less than the total indebtedness (for instance, if the cost to foreclose so far exceeds the requested discount or if the seller is willing to put up other collateral or even to sign another note). Obviously, these are just ideas to open discussions with a seller’s lender in an attempt to resolve a delinquency by sale of the property.

§ 3.2.3 The Buyer Client When representing a buyer, especially a first-time buyer, the attorney’s role can frequently expand well beyond legal advice. Buyers expect their attorneys to be familiar with lending requirements, interest rates at local banks, tax consequences of real estate ownership, condominium law, and basic statutes and regulations such as those governing zoning and landlord-tenant issues.

And like the seller, the buyer client may have reasons to abandon the deal or be forced from it, which should be discussed at this point. Typical questions to ask the buyer include the following: • Have structural/pest/etc. inspections been done? Is there any urea formaldehyde foam insulation, radon, asbestos, lead paint, or chlordane? (See Check- list 3.1 for an environmental review checklist.) • Is the buyer happy with the house? • What arrangements has the buyer made for leaving where he or she now lives? • What time constraints apply? • Are other deals dependent on this one? • Who are the other parties, including brokers or attorneys? • What does the buyer plan to do about financing? • Were any representations made by the broker or seller? • What is the buyer’s degree of emotional involvement? Is he or she likely to compromise to save the deal?

If the seller is in default on his or her mortgage or is negotiating a sale for less than the amount owed on the mortgage(s) on the property, the buyer should be advised that the negotiations in such transactions can be lengthy and that conventional expec- tations regarding the closing date will likely be exceeded.

If the sale arises from a foreclosure, it is possible that the buyer client is dealing with a third party—the original owner’s lender. Property owned by a lender is known as real estate owned (REO) and is not to be confused with a purchase at a foreclosure sale. That transaction requires extensive and diligent research by the potential buyer and his or her attorney because the contract for sale at auction is generally nonnego- tiable and extremely pro–seller/lender. If, instead, the buyer is purchasing from a

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lender itself, the transaction is no different than any other, and all the usual procedures should be followed. Unique concerns include the possibility that the lender would offer special financing programs or that the property has been subject to deterioration because of the lack of the owner’s occupancy or concern regarding its condition. REO lenders as sellers are frequently uncooperative with the buyer’s interests in inspections and adjustments to the sale price, and the buyer should be forewarned that some accommodation may be needed.

§ 3.3 NEGOTIATING THE PURCHASE AND SALE AGREEMENT AND PRECLOSING MATTERS

§ 3.3.1 General Concerns You must treat the purchase and sale agreement with respect, as it is the only governing document to the transaction. Throughout the transaction, you should remember four basic rules: • The goal is to make the deal go forward. Learn to compromise, but do not negotiate your client down the river. • Requirements of the statute of frauds and contract law are minimal. Your client is bound by a document, however basic, that meets the following criteria. The document must – be in writing, – describe the property, – identify the parties, – state a sales price, and – give a date of performance. (In a Superior Court case, a series of e-mails was deemed sufficient to meet the requirements of the statute of frauds. See Shattuck v. Klotzbach, 14 Mass. L. Rptr. 360 (Plymouth Super. Ct. 2001).) • “Caveat emptor” applies to this transaction. • Merger by acceptance of the deed occurs when, with delivery by the seller and acceptance by the buyer of the deed, all provisions of the deal are deemed complied with to the satisfaction of all parties.

§ 3.3.2 Specific Items The specific provisions of the purchase and sale agreement most likely to be subject to negotiation are listed below. The paragraph numbers correspond to those found in the Greater Boston Real Estate Board (GBREB) “standard form” purchase and sale agreement included in Exhibit 3D. A GBREB standard form time extension agreement is included as Exhibit 3E. (The most recent versions of the GBREB’s residential real estate forms are available at http://www.formsforrealestate.com.)

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• The parties involved should be clearly identified. Are there other title holders to be included? How many buyers are there? See paragraph 1. • The property should be fully described. Are there any additional lots involved? See paragraph 2. • Be sure to modify the form as necessary to specify exactly what the client thinks is included with the sale. For example, refrigerators commonly go with the seller unless specifically included. See paragraph 3. • Issues involving quality of title and time to perfect title are almost always subject to negotiation between the parties. While the seller would not want to be bound to clear up title problems, the buyer, of course, wants just that. Some possible compromises are to set a date by which the buyer must set forth ob- jections to title, put a monetary limit on the seller’s liability, or limit the date of the seller’s automatic extension to coincide with the buyer’s commitment expiration date. See paragraphs 4 and 10. • If the seller is taking back financing, the amount should also be noted in the paragraph covering the purchase price with a reference to a paragraph in a rider that includes all terms of the financing. This rider paragraph should be specific enough to bind the parties as to amount, term, rate, number of payments, any balloon features, and the like. See paragraph 6. • Try to find out the actual amount of the seller’s insurance coverage if possible. Generally the phrase “as presently insured” is used, but there could be a problem if there were a fire and the existing coverage has not kept up with the property’s appreciated value. See paragraph 15. • As a buyer’s attorney, you might request final readings for municipal water and electricity to avoid “guesstimates” at closing. See paragraph 17. • As a seller’s attorney, make sure the broker’s commission conforms to the signed listing agreement. See paragraph 18. • In addition, the commission should be payable “when, as and if the Buyer accepts and records the Seller’s deed and the full consideration is paid therefor.” • While brokers are generally very trustworthy, it would not hurt to have the seller’s attorney hold the down payment in escrow. If the escrow is held by an attorney and unless otherwise specified, the funds held are subject to Interest on Lawyers’ Trust Accounts (IOLTA) requirements. If the funds are to be in an interest-bearing account, note it with instructions on how the interest is to be disbursed. See paragraph 20. • Where there is a substantial deposit of 10 percent or more, the seller should be content to limit his or her damages; under these circumstances the “unless” clause following the reference to “liquidated damages” in paragraph 21 may be “lined out” and replaced with “and this shall be Seller’s sole remedy at law or in equity.” • A liquidated damages clause (paragraph 21) will be enforceable “where, at the time the agreement was made, potential damages were difficult to determine

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and the clause was a reasonable forecast of damages expected to occur in the event of a breach.” Kelly v. Marx, 428 Mass. 877, 878 (1999). It will not be enforceable if “the sum is ‘grossly disproportionate to a reasonable estimate of actual damages’ made at the time of contract formation.” Kelly v. Marx, 428 Mass. at 880 (quoting Lynch v. Andrew, 20 Mass. App. Ct. 623, 628 (1985)). • A place is provided to put in, if you represent the buyer, or omit, in the case of the seller, those oral representations noted earlier in your interview with the client. Also, if any adjustments are to be made, or if any work is to be done, as a result of the pest or home inspections arising from the offer contingencies, note that as well. See paragraph 25. • A quick reading of the paragraphs on plans and the liability of a trustee, share- holder, beneficiary, or other representative shows that they are generally not applicable and “lined out” of the contract. See paragraphs 5 and 24. • The mortgage contingency included in the standard purchase and sale form is a starting point for negotiation between the parties, mostly about the dates. Ob- viously, the buyer does not want to be rushed on such important matters, but the seller should not have to keep his or her property off the market indefinitely while awaiting a firm deal. Regardless of what rider paragraph appears on a purchase and sale agreement that you are reviewing, always read the paragraph on mortgage financing carefully, explain it fully to the client, and make any necessary changes to reflect the deal. For example, the seller may require the buyer to apply to more than one lender, or the buyer may want to reserve the right to apply for a special loan program. Inquire as to the buyer’s intent regarding financing and adapt the requirements of the standard form to meet the deal. Some aspects commonly negotiated between parties are – to which lender(s), and the number of lenders, the buyer must apply (case law suggests a minimum of two; the buyer should specify if he or she in- tends to apply to only one); – limitations on the number of persons able to receive notice of the buyer’s application status; – with respect to condominiums, a requirement that the seller comply fully with requests by the buyer’s lender for information regarding the unit and the project; and – what constitutes denial by a lender (no commitment as of the date specified? formal denial letter? an excessive number of contingencies included in the buyer’s commitment letter?). See paragraph 26. See also § 3.3.2(c), Financing Concerns, below. • Many real estate boards in Massachusetts use “seller’s statement” forms to ac- quire information and as a marketing hook. These forms are often executed long before the seller engages an attorney to represent him or her in the transaction. One of the purposes of the form is to limit the liability of the real estate brokers engaged by the seller.

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– Buyer’s counsel should request that the seller’s statement be incorporated as a warranties and representations exhibit in the purchase and sale agreement. – Seller’s counsel should review the seller’s statement form to verify the accu- racy of the information presented to potential buyers. If new information comes to light after the seller’s statement is prepared, the statement must be amended accordingly or clarified. • Often the buyer will be taking a title that involves resolving issues arising from the current (or a prior) owner’s death. The purchase and sale agreement should give you some ideas as to whether the title is coming out of an estate. If the current owner is recently deceased, the purchase and sale agreement will most frequently be executed by the fiduciary for the estate (called the personal representative). This should immediately alert you that you should be concerned with various issues when taking title from a probate. – Your title examiner should carefully abstract or copy the probate packet. As a general rule, if the most recent owner died testate, the will may include a power to sell. If so, the personal representative has authority to convey title. In addition, a conveyance pursuant to a power of sale under the will cuts across debts of the estate (one year from the appointment of the fiduciary) and costs of administration (six years from the date of death). Otherwise, the personal representative would need a license from the Probate Court. If a final account has been filed and allowed, the heirs (in the case of intestacy) or devisees (in the case of a will) are able to convey title. For those new to the conveyancing practice, it is suggested that outside advice (from the court or a title insurance underwriter) be sought before concluding that the seller has delivered good title.

Practice Note Massachusetts has adopted the Massachusetts Uniform Probate Code, G.L. c. 190B, effective on March 31, 2012. See 2008 Mass. Acts c. 521; see also 2011 Mass. Acts c. 224 (extending the act’s effective date to March 31, 2012). Applicable probate forms and procedures for taking title after death have changed accordingly. Both buyers’ and sellers’ counsel should be aware of these changes and modify any recitals or addenda to purchase and sale agreements accordingly. – If your grantors are in the process of getting a divorce or are recently di- vorced, you should review the divorce papers, including any separation agreements, court orders, or judgments. This is particularly important when the conveyance is from husband to wife or wife to husband. In that case, you should be particularly aware of whether there is anything in the court papers that would require one spouse to give a second mortgage to the conveying spouse or grant a right of first refusal to the conveying spouse. If the agreement provides for the proceeds to be divided in a specific way, you should verify this with the sellers’ attorneys before you sit down at the closing table.

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(a) Multifamily Dwellings

If the property is a multifamily dwelling, you should • ascertain if the tenants are to stay or vacate before the closing; • confirm the rents; • review the leases or tenancy agreements, including utility arrangements; and • check the status of any security deposits.

(b) Condominiums

If the property is a condominium: • A different purchase and sale form is used, but the above discussion is generally pertinent to the corresponding paragraphs therein. (See the GBREB form included as Exhibit 3F. The most recent versions of the GBREB’s residential real estate forms are available at http://www.formsforrealestate.com.) • In advance of signing the purchase and sale agreement, all condominium documents, including the master deed, trust, plans, and all amendments, should be reviewed. The buyer should know about the rules and regulations, especially those restrictions to which he or she may not want to be subject. Any amenities such as parking, pools, and so on should be confirmed. • The seller should be asked about the financial stability of the governing organization, and the budget should be reviewed. Inquiry should be made of the seller and/or the trustees as to the status of any planned or voted special assessments. • Inquiry should be made about prior approvals from the Federal National Mort- gage Association (FNMA or “Fannie Mae”) and the Federal Home Loan Mortgage Corporation (FHLMC or “Freddie Mac”). • Make sure that the inspection of a condominium includes the common areas as well as the unit itself. The common area inspection may reveal deferred maintenance needs and inadequately performed repairs that may result in in- creased condominium fees and special assessments.

In the past few years, the availability of mortgage financing, as well as types of loan products available, has changed drastically. With the implementation of the Consumer Finance Protection Bureau’s Ability to Repay Rule (effective January 2014), buyers will find that the mortgage application process will take more time, involve many more verifications (income, savings, and employment status), and require reverifica- tions up to the time of actual closing. Even then, lenders may not be willing to make the loan without additional terms for the lender’s protection, such as requiring mortgage insurance.

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For those who represent buyers and sellers, there is a longer period needed to secure the commitment from the lender and more information needed by the lender to process the application. This situation has led to more-detailed financing contingencies, including requests for extensions up to the closing date, clarifying that the seller will cooperate with the buyer’s lender’s need for information (such as amounts of annual homeowner’s association dues) and a cap on the amount of the buyer’s deposit that is at risk if the lender fails to fund the loan at the last minute and where the buyer is not at fault.

Buyer clients should be encouraged to prequalify with a lender before beginning to “house hunt”; at a minimum, they should inquire about the new procedures for applying for and receiving a loan commitment. New regulations have changed both the way lenders provide information to their potential borrowers and the type of information provided once a property has been identified. Although a review of all the nuances of the Consumer Financial Protection Bureau’s (CFPB’s) changes to the Federal Truth in Lending and Real Estate Settlement Procedures Acts pursuant to a new rule (TRID, effective October 2015) is beyond the scope of this chapter, at a minimum buyer’s attorneys need to familiarize themselves with the loan estimate (see Exhibit 3G), the closing disclosure (see Exhibit 3H), and the requirements for timing of those disclosures.

Practice Note Due to stringent mortgage lending procedures, the buyer may be unable to perform on the contractual closing date due to the requirements of his or her lender or federal law, regardless of the extent of the buyer’s coop- eration. While the exact nature of practice in this area will continue to evolve as practitioners become more familiar with the new rules, many purchase and sale agreements include a paragraph relating to time for performance, providing a means by which the buyer can extend the date for performance regardless of the dates in the financing contingency if the lender is unable to complete the underwriting or closing of the loan due to statutory or regulatory issues. In addition, if the property is a condominium, the lender will need additional time for investor approval of the condominium project as a whole, in addition to underwriting the buyer and appraising the subject unit.

§ 3.4 AWAITING THE CLOSING Once the purchase and sale agreement is executed, some lawyers may tend to relax, assuming that nothing more need be done until the actual closing. While that assumption may sometimes hold true, most clients appreciate the help and counsel of a lawyer while awaiting the closing. During this time you should attend to the following matters.

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§ 3.4.1 General Communication The most important thing that you can do, whether you are representing the buyer, seller, or lender, is to maintain good communication, not only with your client but also with all the parties to the transaction. Your client will look to you for information about how various aspects of the transaction are progressing. You must be prepared to have this information available or be able to obtain it and convey answers to your client promptly. If you establish communication with the other party’s counsel, the brokers, and the lender or the lender’s counsel, you will be able to provide high-quality service to your client. You will also gain a reputation for being accessible and prepared—two key qualities that may result in a sense of professionalism, lead to further referrals, and be an asset to your transactions with other members of the conveyancing community.

§ 3.4.2 Financing Concerns Awaiting final word on financing is the most difficult part of this period. Once the contingency period for obtaining financing expires, the buyer is obligated to close the deal. If no firm financing is in place on the expiration date, try to extend the date, or cancel the deal.

Because of tighter regulations of the lending industry, mortgage applications may require more documentation than in the past, thereby lengthening the time necessary for a final decision. For a seller’s attorney, a muddled situation is created wherein the contingency expires and no decision has been rendered. While the buyer’s counsel may wish to cancel to protect the buyer’s rights, the seller may not want to lose a deal. An extension of the date may be appropriate, especially if the seller’s attorney can speak to the buyer’s lender to get a firm sense of the situation and the buyer promises to pursue all additional lender requirements.

The buyer and the buyer’s counsel should review any commitment to lend based on an analysis of automated underwriting. The contingencies contained in such com- mitments may be more than the buyer or seller is willing to accept.

§ 3.4.3 The “Bank” Attorney While the practice has eroded somewhat over the past few years, generally the lender determines who will represent it and “close the loan.” The lender’s attorney considers a title examination, a plot plan, and a municipal lien certificate in order to ascertain the status of title. In their dealings with the lender’s attorney, the buyer, seller, and their counsel should remember that he or she is responsible solely for closing the mortgage loan and ensuring that the financing documents are correct. Therefore, any determination made regarding prior liens or encumbrances of title is only to establish what needs to be discharged in order for the lender’s loan to have first priority. The actual sale transaction remains the buyer’s and seller’s responsibility. Consequently, the buyer and seller and their attorneys should not rely on the lender’s attorney either to remind them of closing adjustments (such as collected rents or prepaid fuel) or to

MCLE, Inc. | 6th Edition 2017 3–11 § 3.4 Massachusetts Basic Practice Manual enforce the terms of the contract (such as confirming that repairs have been completed). Once the closing has been assigned to an attorney by the lender, the buyer’s and seller’s attorneys should call, identify themselves, and ask if there is anything they can do or are expected to do. They should also advise the attorney of any special circumstances, such as the seller needing certified funds immediately at closing in order to buy another property, the buyer having trouble obtaining certified funds, or one of the buyers being absent from the closing. By working with the lender’s attorney, items such as those referenced above would be included in the final settlement figures, and the closing will proceed more smoothly.

§ 3.4.4 Title Problems Once the buyer’s or lender’s attorney has reviewed the title, the seller’s attorney is notified of any title defects. As a general rule, title issues fall into two categories: those that need a payoff and those that need time. Most monetary issues (e.g., liens, attachments, mortgages) require only that the seller have sufficient funds to pay every- one and that the seller’s attorney arrange for releases to be presented at closing. However, those that require additional work to be done to clear the title will take additional time.

For issues that require the payoff of a lien against the property, the seller’s attorney will need to contact the creditor and obtain a verifiable statement of the amount due to clear title by the issuance of a release. If the creditor is a person (rather than an entity), the lender’s attorney will require that the discharging document be obtained in advance of the closing and held in escrow pending payment (in the unlikely event of the creditor’s death or disability at or after the closing).

As noted, other problems require time to cure the defect. A common problem is the need to clarify title due to the death of an owner in the chain of title. This may require that an estate be probated or that a death certificate (from the city or town hall or the Massachusetts Division of Vital Statistics) or a release of estate tax lien (Form M-792 from the Department of Revenue) be obtained.

In addition, if a plot plan is obtained, zoning issues arising from encroachments, insufficient setbacks, or building additions may be found, possibly requiring the issuance of a variance. Contact the building department to begin this process.

As properties that were refinanced multiple times are sold, the additional problem arises of undischarged but paid-off mortgages. Specifically, this problem occurs when an owner refinanced a mortgage and the attorney or closing agent for the refinancing institution did not take all the steps necessary to track down a discharge of the mortgage loan that had been paid off at the refinancing closing.

The discharge may be in the attorney’s file (the seller’s settlement statement or the notary name on the current mortgage should have this person’s name), or it may be available from the original lender by making a phone call or letter inquiry. The attorney may have ceased practicing, or his or her firm may have been dissolved. The

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lender whose loan was paid off may have merged into another institution, been taken over by a federal regulator, or filed for bankruptcy.

If the discharge in question cannot be obtained easily, a policy of owner’s title insurance may be helpful. Contact the underwriter who issued the owner’s policy and determine if coverage exists for this issue.

Massachusetts General Laws provide for discharging the mortgage by means of an affidavit. G.L. c. 183, § 55. While most practitioners prefer to obtain the actual discharge, the affidavit form may be used out of necessity. If the lender in question cannot be found, a check with the Massachusetts Division of Banks usually assists in tracking it down.

Finally, in the event that a lender has foreclosed its mortgage in the back chain of title, an issue may arise due to state court decisions about the validity of the foreclosure. The line of cases beginning with U.S. Bank National Ass’n v. Ibanez, 458 Mass. 637 (2011), and Eaton v. Federal National Mortgage Ass’n, 462 Mass. 569 (2012), invalidated a number of mortgagee foreclosure actions, and certain Housing Court decisions have stalled evictions until the underlying foreclosure procedure is corrected.

Practice Note While a curative statute (2015 Mass. Acts c. 141, amending G.L. c. 244, § 15) was passed in 2015, with an effective date for sales within the past three years of December 2016, it does not cure all possible defects in the conduct of a mortgage foreclosure. Exercise care: consultation with a title insurance underwriter is highly recommended.

§ 3.4.5 The Seller’s Attorney While awaiting the closing, be sure your client has made arrangements for • a smoke detector certificate (usually the broker does this), • a carbon monoxide detector certificate (usually the broker does this), • the deed (which you prepare), • resolution of any title problems, and • an insurance certificate and 6-d certificate if the property is a condominium.

§ 3.4.6 The Buyer’s Attorney As the buyer’s attorney, be sure your client has • a complete “punch list” of outstanding items (if called for by the purchase and sale agreement); • a homeowner’s insurance policy in an amount equal to the mortgage amount or 100 percent replacement costs, and that he or she has advised the lender or lender’s attorney of the annual premium;

MCLE, Inc. | 6th Edition 2017 3–13 § 3.4 Massachusetts Basic Practice Manual

• completed bank requirements; • sufficient funds in bank checks; and • a decision as to form of tenancy.

§ 3.4.7 The “Figures” Both sides want to know as early as possible what their expenses will be. Forms listing respective expenses can help them plan ahead (see Exhibit 3I for a buyer’s adjustment form and Exhibit 3J for a seller’s adjustment form).

§ 3.4.8 Other Issues If there is no financing (cash sale), if the seller is financing the deal (taking back a mortgage), or if the buyer is assuming the seller’s outstanding mortgage (taking over a mortgage), the buyer’s attorney must also • order and review the title report; • order and review the municipal lien certificate; • order and review the plot plan; • get payoff figures for encumbrances noted on the title; • draft documents (note and mortgage to seller, assignment of escrows, indemni- fication agreements); • record documents at the registry after closing; • disburse funds to discharge liens; and • place title insurance.

These matters are beyond the scope of an introductory chapter and should be investi- gated in greater depth before attempting. Most title insurance companies are helpful in providing assistance regarding title issues and form books, including the standard secondary market forms, and are an excellent point to begin any document drafting.

§ 3.5 THE CLOSING

§ 3.5.1 Preparation If prior dealings between the parties have been amiable, the closing itself can be en- joyable for all. Unfortunately, the converse also holds true. The best way to prevent unnecessary animosity at closing is to have all possible problems resolved in advance.

Due to the federal lending requirements of the TRID rule, the buyer/borrower must have received a copy of the closing disclosure three business days before closing. In order to do that, the lender, who commonly is the one preparing the closing disclosure, must have all of the figures necessary in advance of the actual closing date. To

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be well prepared, the buyer and seller should have final figures confirmed a week in advance—including amounts for mortgage payoffs; water, sewer, and electric bills; and amounts for prorations such as real estate taxes, rent, or oil.

The day or two before the closing, make sure the items listed above are ready and confirm them with the client. In addition, the buyer should have ready for the closing the following: • the original commitment letter, • compliance with any outstanding bank requirements, and • any concerns raised by the final inspection.

Items the seller’s attorney needs to have ready for the closing include those in the list above as well as the following: • title-related items required by the bank attorney, and • copies of any bills that were the basis of payoff or adjustments.

§ 3.5.2 Actual Closing Procedure Usually the bank attorney runs the show. There is typically a package of forms comparable to Exhibits 3H to 3CC, although you should keep in mind that the specific content of these forms is subject to updating and other changes. Go over all forms with the client and explain the unusual, with particular attention to • figures on the closing disclosure (see Exhibit 3H), which should be the same as the one provided earlier or have an explanation; • deed description (see Exhibit 3K); • note terms, which should conform to the commitment letter; • mortgage terms (see Exhibits 3L–3R); and • plot plan and attorney certification of title (see Exhibits 3S–3T).

Make arrangements for copies of all documents executed by your client, as well as the municipal lien certificate (see Exhibit 3U).

Make arrangements for funds due the seller or getting the original deed and title policy back for the buyer.

See Checklist 3.2 for a closing checklist. For a set of general tips on developing a residential real estate practice, see Checklist 3.3.

MCLE, Inc. | 6th Edition 2017 3–15 Massachusetts Basic Practice Manual ü CHECKLIST 3.1 Environmental Review—Residential Property

Interior q Lead Paint q Urea Formaldehyde Foam Insulation (“UFFI”) q Asbestos q Radon q Lead Plumbing q Carbon Monoxide q Water Quality Analysis q Wood Boring Pests q Miscellaneous Hazardous Materials (paint, stains, pesticides, motor oil and anti- freeze, cleaning solutions) q Evidence of Oil or Hazardous Materials Contamination

Exterior q Lead Paint q Asbestos Siding q Pesticide Applications q Septic System or Other Wastewater System q Wood Boring Pests q Underground Fuel Storage Tanks q Defective Construction or Structures

Property and Grounds q Septic Systems q Drinking Water Supply (public/private)

3–16 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home q Wetlands, Riverfront Area and Floodplains q General Condition of All Structures q Evidence of Oil or Hazardous Materials Contamination q Establishment of Property Boundaries

MCLE, Inc. | 6th Edition 2017 3–17 Massachusetts Basic Practice Manual ü CHECKLIST 3.2 Closing

COLLECT AT CLOSING

Date Time

Borrowers Sellers

GET REC’D GET REC’D Borrowers to Endorse Photo ID Funding Check Trustees Certificate Buyer Check $_____ Mortgage Broker Smoke/CO Detector Check Certificate Sellers Check $_____ Insurance Binder & 6-D Certificate PD Recpt. Cert. of Ins. Condo Flood Insurance & Unit Plan Condo PD Recpt. Right of 1st Refusal Deed Power of Attorney Occupancy Cert. Affidavit for POA Executed P&S M-792 Owners Duplicate Cert. Discharge _____ HUD-Previous Sale Proof of Deposit Paid Water/Sewer/ Paid Tax Bill Electric Corporate Vote Fed. Estate Tax Affidavit

ADDITIONAL ITEMS TO BE COLLECTED AT CLOSING:

REC’D

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ITEMS TO BE DONE POST CLOSING

DATE OF DISBURSEMENT

DATE OF RECORDING

MCLE, Inc. | 6th Edition 2017 3–19 Massachusetts Basic Practice Manual ü CHECKLIST 3.3 General Tips on Developing a Residential Real Estate Practice

As you develop your real estate practice, you will find the following suggestions helpful: q Find the local registry of deeds and probate. q Obtain and study in advance the standard mortgage applications, condominium documents, and loan documents. q Keep samples of documents that are new to you from any closing. q Read the real estate section of the Boston Globe, Lawyers Weekly, and other papers to have answers to questions raised in the popular press that clients may bring up. q Discuss your charges at the first interview and give the client a rough idea of what his or her costs will be. Allow a minimum of one hour for the initial interview, one hour for the closing, and another hour for phone calls. Keep track of your time on the different parts of the transaction and bill accordingly, but do not price yourself out of the market. q When setting up files, index your real estate files by name of client and property address. Create a form for the names of parties and your notes to staple inside the file and fill it out at the initial interview. Then remember to keep detailed notes of who said what and when. q Establish a tracking system that works well for you, one that allows you to review the status of each party’s transaction, as well as to locate the files themselves. You should always maintain a calendar of contingency and closing dates so that you are not putting your client at risk for nonperformance of any of the purchase and sale contract’s provisions.

3–20 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3A—Offer to Purchase

MCLE, Inc. | 6th Edition 2017 3–21 Massachusetts Basic Practice Manual EXHIBIT 3B—Sample Information Form for Initial Client Telephone Call

Caller name (Referred by?) Status: seller buyer other Names of all clients

Addresses (for billing)

E-mail Addresses*

Practice Note While many consider e-mail a blessing for its speed and brevity, the “E-mail Addresses” item of this form warrants a special note of caution. Unlike correspondence between sophisticated corporate clients or among fellow attorneys, much of the communication in home purchase and sale transactions is between lawyers and lay purchasers, some of whom are using an attorney for the first time. Education about the potential perils of e-mail may be needed. First, there is the distinct possibility of an e-mail message being construed as a formal communication and thus incorporated into negotiations in a way that was not the intent of all the parties. Therefore, any casual comments should be confirmed before being relied on in contract discussions. Second, many consumer e-mail addresses are inherently insecure and inappropriate for the communication of confidential, nonpublic, financial information about a consumer. As much as the client may push for e-mail–only communications, use care that you are not subjecting yourself to any consequences for misuse.

Phone numbers home

Primary contact

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Other parties (seller/buyer, attorneys, brokers and buyers-brokers, etc.) broker

seller/buyer

attorney

MCLE, Inc. | 6th Edition 2017 3–23 Massachusetts Basic Practice Manual EXHIBIT 3C—Lead Paint Notification Certificate

Lead Paint Notification Certificate

Property transfer notification certification to be signed by the prospective purchaser prior to signing a purchase and sale agreement for residential property constructed prior to 1978. The Massachusetts Department of Public Health’s notification was provided to prospective purchaser. The prospective purchaser has read the notification or has had it read to him/her. The real estate agent has represented to the prospective purchaser that he/she has provided the prospective purchaser with verbal information on the possible presence of dangerous levels of lead in paint, plaster, soil or other materials and the provisions of the Lead Law and Regu- lations. The real estate agent has represented to the prospective purchaser that he/she has provided the prospective purchaser with verbal information on the possible presence of dangerous levels of lead in paint, plaster, soil or other materials and the provisions of the Lead Law and Regu- lations. The prospective purchaser was verbally informed about the availability of inspections for dangerous levels of lead.

I, , have been so informed and notified. Prospective Purchaser’s Signature

Date

Address of Residential Property

Real Estate Agent’s Signature Date

3–24 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3D—Purchase and Sale Agreement

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ADDENDUM TO PURCHASE AND SALE AGREEMENT

ACCESS:

The Buyer and their agents shall have a right of access to the premises prior to the time specified for delivery of the Seller’s deed for the purpose of inspecting the condition of the premises or showing the premises to prospective mortgage lenders. Said right of access shall be exercised only in the presence of Seller or Seller’s agent(s) and only after reasonable notice to the Seller.

CONDITION OF THE PREMISES:

The Seller agrees to deliver the premises at the time of delivery of the Seller’s deed in broom clean condition, removing all of the Seller’s possessions and other property therefrom which is not being left for the Buyer’s benefit, as consented to by them.

CLOSING DOCUMENTS:

Seller agrees at the closing to execute all documents which may be reasonably required by the Buyer’s mortgage lender including title insurance affidavit and indem- nification, FIRPTA affidavit, Form 1099 designation agreement, and lead paint disclosure and UFFI affidavit.

TITLE STANDARDS:

Any title matter which is the subject of a Title Standard of the Real Estate Bar Asso- ciation for Massachusetts at the time for the delivery of the deed shall be governed by said Title Standard to the extent applicable.

TITLE:

Notwithstanding anything herein contained, the premises shall not be considered to be in compliance with the provisions of this Agreement with respect to title unless:

(a) all structure and improvements, including but not limited to any driveway(s), garage(s) and all means of access to the premises shall be wholly within the boundary lines of the premises and shall not encroach upon or under any property not within such boundary lines;

(b) the premises abut a public way, duly laid out and accepted by the town or city in which the premises are located;

(c) no building, structure, improvement, property, right of way or easement of any kind belonging to any other person or entity encroaches upon or under the premises from other premises; and

(d) title to the premises is insurable, for the benefit of the Buyer, by a title insurance company, in a fee owner’s policy of title insurance at normal premium rates, in the American Land Title Association form currently in use.

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INSPECTION:

The Buyer acknowledges that they have inspected the premises, including all improvements thereon, or has caused the same to be inspected and that the Buyer is fully satisfied with the conditions thereof. The premises are to be conveyed in their present “as is” condition, reasonable wear and tear excepted.

OIL TANKS:

Seller warrants and represents that to the best of their knowledge, as of the closing, there are no underground storage tanks under the dwelling or on the premises. The provisions of this paragraph shall survive delivery of the deed.

NOTICES:

All notices required hereunder shall be deemed to have been duly given if in writing and delivered by hand or by telecopy or mailed by registered or certified mail, return receipt requested all charges prepaid, addressed to Buyer or Seller at their respective addresses designated above, and in the case of Seller a copy thereof to J. D. Goode, Esq., 100 Franklin Street, Boston Massachusetts 02110; and in the case of Buyer, a copy thereof to Alberto Abogado Jr., Esq., 28 Main Street, P.O. Box 1000, East Worktown, Massachusetts 01000.

3–30 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3E—Time Extension Agreement

MCLE, Inc. | 6th Edition 2017 3–31 Massachusetts Basic Practice Manual EXHIBIT 3F—Standard Form Condominium Purchase and Sale Agreement

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MCLE, Inc. | 6th Edition 2017 3–35 Massachusetts Basic Practice Manual EXHIBIT 3G—Loan Estimate

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MCLE, Inc. | 6th Edition 2017 3–37 Massachusetts Basic Practice Manual

3–38 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3H—Closing Disclosure

MCLE, Inc. | 6th Edition 2017 3–39 Massachusetts Basic Practice Manual

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MCLE, Inc. | 6th Edition 2017 3–43 Massachusetts Basic Practice Manual EXHIBIT 3I—Buyer’s Adjustment Form

BUYER’S ADJUSTMENTS

Closing Date: May 15, 1994

Sale price: $120,000.00 less deposit 15,000.00 Subtotal: $135,000.00 less mortgage amount 120,000.00 BALANCE: $15,000.00

Plus Closing Costs:

Point(s) due lender (2.0): 2,400.00 Interest in advance (16 days x $23.01/day): 368.16 Bank fees: (from commitment letter and/or good faith estimate)

Escrows:

Hazard Insurance 2 mo x 65/mo 130.00 PMI Insurance N/A N/A Taxes 2 mo x 150/mo 300.00

Legal Fees and Disbursements: $1831.00

Attorney fee: $1,150.00 Recording 49.00

Additional Premium 270.00 (Lenders) Title Insurance 192.50 (Owners) Plot plan 125.00 MLC 25.00 Title Abstract 192.00 Other deliveries, etc. 20.00

Other Adjustments: Real estate taxes $221.92

Oil N/A N/A

TOTAL: $20,251.08

3–44 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3J—Seller’s Adjustment Form

SELLER’S ADJUSTMENTS

Closing Date: May 15, 1994

Sale price: $150,000.00

less deposit:* 15,000.00

Broker’s commission 9,000.00

Document preparation N/A

Recording fees: 10.00

Stamps: 684.00

Mortgage Payoffs: (to 5/20) 94,682.11

Trash Fee: 150.00

Water: 145.00

Adjustments:

Real estate taxes $221.92

Oil N/A N/A

TOTAL: $30,550.81

* IF THE BROKER IS HOLDING THE DEPOSIT, AND WILL BE APPLYING THE DEPOSIT TOWARD THE COMMISSION, DO NOT DEDUCT THE COMMISSION; THE BROKERS SHOULD BRING A “EXCESS DEPOSIT” CHECK TO PAY THE SELLER THE BALANCE OF THE DEPOSIT AT THE CLOSING.

MCLE, Inc. | 6th Edition 2017 3–45 Massachusetts Basic Practice Manual EXHIBIT 3K—Deed

We, Samuel Seller and Suzanne Seller of 2 New Street, Newtowne, Middlesex South County, Massachusetts, being unmarried, for consideration paid One Hundred Fifty Thousand Dollars ($150,000.00) grant to Robert Buyer and Elizabeth Buyer as husband and wife as tenants by the entirety of 2 Home Street, Yourtown, Massachusetts with quitclaim covenants the land in (Description and encumbrances, if any)

A certain parcel of land with the building thereon situated on Home Street Yourtown, Middlesex County, Massachusetts, being bounded on Lot D on a plan of land entitled “Land In Yourtown, MA” drawn by Sid Surveyor R.L.S., dated September 23, 1934, and recorded with Middlesex South County Registry of Deeds in Plan Book 117 Plan 8, to which plan reference is made for a more particular description and being bounded and described as follows:

NORTHERLY by Home Street, One Hundred Forty and 62/100 (140.62) feet, more or less;

EASTERLY by a stone wall, by two courses, Eighty Nine and 76/100 (89.76) feet, and Sixty One and 98/100 (61.98) feet, more or less;

SOUTHERLY by a stone wall, Eighty Six and 56/100 (86.56) feet, more or less; and

WESTERLY by a stone wall, One Hundred Thirty Three and 82/100 feet, more or less.

Containing 16,140 square feet of land, more or less, according to said plan. For title reference, see deed dated July 12, 1986, and recorded with Middlesex South Registry of Deeds at Book 11216, Page 53.

Witness _____ hand and seal this _____ day of _____ 20__

Samuel Seller

Suzanne Seller

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The Commonwealth of Massachusetts

Middlesex ss. May 15, 1994

Then personally appeared the above named Samuel Seller and Suzanne Seller and acknowledged the foregoing instrument to their free act and deed, be before me,

Notary Public—Justice of the Peace

My Commission expires 11/08 2015

MCLE, Inc. | 6th Edition 2017 3–47 Massachusetts Basic Practice Manual EXHIBIT 3L—Note

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MCLE, Inc. | 6th Edition 2017 3–49 Massachusetts Basic Practice Manual

3–50 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3M—Mortgage

After Recording Return To:

[Space Above This Line For Recording Data]

MORTGAGE DEFINITIONS

Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16.

(A) “Security Instrument” means this document, which is dated _____, _____, together with all Riders to this document.

(B) “Borrower” is _____. Borrower is the mortgagor under this Security Instrument.

(C) “Lender” is _____. Lender is a _____ organized and existing under the laws of _____. Lender’s address is _____. Lender is the mortgagee under this Security In- strument.

(D) “Note” means the promissory note signed by Borrower and dated _____, _____. The Note states that Borrower owes Lender _____ Dollars (U.S. $_____) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than _____.

(E) “Property” means the property that is described below under the heading “Transfer of Rights in the Property.”

(F) “Loan” means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest.

(G) “Riders” means all Riders to this Security Instrument that are executed by Bor- rower. The following Riders are to be executed by Borrower [check box as applicable]:

[ ] Adjustable Rate Rider [ ] Condominium Rider [ ] Second Home Rider

[ ] Balloon Rider [ ] Planned Unit [ ] Other(s) _____ [specify] Development Rider

[ ] 1-4 Family Rider [ ] Biweekly Payment Rider

MCLE, Inc. | 6th Edition 2017 3–51 Massachusetts Basic Practice Manual

(H) “Applicable Law” means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions.

(I) “Community Association Dues, Fees, and Assessments” means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization.

(J) “Electronic Funds Transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearing- house transfers.

(K) “Escrow Items” means those items that are described in Section 3.

(L) “Miscellaneous Proceeds” means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of, the Prop- erty; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property.

(M) “Mortgage Insurance” means insurance protecting Lender against the non- payment of, or default on, the Loan.

(N) “Periodic Payment” means the regularly scheduled amount due for (i) principal and interest under the Note, plus (ii) any amounts under Section 3 of this Security Instrument.

(O) “RESPA” means the Real Estate Settlement Procedures Act (12 U.S.C. §2601 et seq.) and its implementing regulation, Regulation X (12 C.F.R. Part 1024), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, “RESPA” refers to all requirements and restrictions that are imposed in regard to a “federally related mortgage loan” even if the Loan does not qualify as a “federally related mortgage loan” under RESPA.

(P) “Successor in Interest of Borrower” means any party that has taken title to the Property, whether or not that party has assumed Borrower’s obligations under the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Bor- rower’s covenants and agreements under this Security Instrument and the Note. For

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this purpose, Borrower does hereby mortgage, grant and convey to Lender and Lend- er’s successors and assigns, with power of sale, the following described property located in the

of [Type of Recording Jurisdiction] [Name of Recording Jurisdiction]

which currently has the address of [Street]

, Massachusetts (“Property Address”): [City] [Zip Code]

TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.”

BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to mortgage, grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. cur- rency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer.

Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to

MCLE, Inc. | 6th Edition 2017 3–53 Massachusetts Basic Practice Manual refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Pay- ment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Peri- odic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note.

If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note.

Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments.

3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum (the “Funds”) to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mort- gage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called “Escrow Items.” At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower’s obligation to pay the

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Funds for any or all Escrow Items. Lender may waive Borrower’s obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower’s obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase “covenant and agreement” is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required under this Section 3.

Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law.

The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA.

If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments.

Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender.

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4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Commu- nity Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower shall pay them in the manner provided in Section 3.

Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender’s opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4.

Lender may require Borrower to pay a one-time charge for a real estate tax veri- fication and/or reporting service used by Lender in connection with this Loan.

5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term “extended coverage,” and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender’s right to disapprove Borrower’s choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time re- mappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender’s option and Borrower’s expense. Lender is under no obligation to purchase any particular type or amount of coverage. There- fore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower’s equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt

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of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

All insurance policies required by Lender and renewals of such policies shall be subject to Lender’s right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee.

In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Un- less Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender’s security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lend- er’s satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender’s security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2.

If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower’s rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower’s rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due.

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6. Occupancy. Borrower shall occupy, establish, and use the Property as Bor- rower’s principal residence within 60 days after the execution of this Security In- strument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control.

7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to de- teriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower’s obligation for the completion of such repair or restoration.

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause.

8. Borrower’s Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower’s knowledge or consent gave materially false, mis- leading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower’s occupancy of the Property as Borrower’s principal residence.

9. Protection of Lender’s Interest in the Property and Rights Under this Se- curity Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender’s interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instru- ment or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender’s actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appear- ing in court; and (c) paying reasonable attorneys’ fees to protect its interest in the

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Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9.

Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.

10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insur- ance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again be- comes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insur- ance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender’s requirement for Mortgage Insur- ance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower’s obligation to pay interest at the rate provided in the Note.

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Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed. Bor- rower is not a party to the Mortgage Insurance.

Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums).

As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, and other entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower’s payments for Mortgage Insurance, in exchange for shar- ing or modifying the mortgage insurer’s risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer’s risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed “captive reinsurance.” Further:

(a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage In- surance, and they will not entitle Borrower to any refund.

(b) Any such agreements will not affect the rights Borrower has – if any – with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination.

11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender.

If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender’s security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender’s satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Mis- cellaneous Proceeds. If the restoration or repair is not economically feasible or

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Lender’s security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.

In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instru- ment, whether or not then due, with the excess, if any, paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscella- neous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due.

If the Property is abandoned by Borrower, or if, after notice by Lender to Bor- rower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. “Opposing Party” means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds.

Borrower shall be in default if any action or proceeding, whether civil or crimi- nal, is begun that, in Lender’s judgment, could result in forfeiture of the Property or other material impairment of Lender’s interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender’s judgment, precludes forfeiture of the Prop- erty or other material impairment of Lender’s interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender’s interest in the Property are hereby assigned and shall be paid to Lender.

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All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2.

12. Borrower Not Released; Forbearance By Lender Not a Waiver. Exten- sion of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender’s acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.

13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower’s obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a “co-signer”): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer’s interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer’s consent.

Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower’s obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower’s rights and benefits under this Se- curity Instrument. Borrower shall not be released from Borrower’s obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of Lender.

14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower’s default, for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys’ fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.

If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted

3–62 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower’s acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge.

15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower’s notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Bor- rowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower’s change of address. If Lender specifies a procedure for reporting Borrower’s change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender’s address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instru- ment shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Ap- plicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

16. Governing Law; Severability; Rules of Construction. This Security In- strument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision.

As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word “may” gives sole discretion without any obligation to take any action.

17. Borrower’s Copy. Borrower shall be given one copy of the Note and of this Security Instrument.

18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, “Interest in the Property” means any legal or beneficial interest in the

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Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

19. Borrower’s Right to Reinstate after Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Bor- rower’s right to reinstate; or (c) entry of a judgment enforcing this Security Instru- ment. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the sums secured by this Security In- strument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Sec- tion 18.

20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the “Loan Servicer”) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing

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obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser.

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party’s actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20.

21. Hazardous Substances. As used in this Section 21: (a) “Hazardous Sub- stances” are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) “Environmental Law” means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) “En- vironmental Cleanup” includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an “Environmental Condition” means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup.

Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally rec- ognized to be appropriate to normal residential uses and to maintenance of the Prop- erty (including, but not limited to, hazardous substances in consumer products).

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Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Prop- erty. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Ap- plicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the STATUTORY POWER OF SALE and any other remedies permitted by Appli- cable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees and costs of title evidence.

If Lender invokes the STATUTORY POWER OF SALE, Lender shall mail a copy of a notice of sale to Borrower, and to other persons prescribed by Appli- cable Law, in the manner provided by Applicable Law. Lender shall publish the notice of sale, and the Property shall be sold in the manner prescribed by Appli- cable Law. Lender or its designee may purchase the Property at any sale. The proceeds of the sale shall be applied in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable attorneys’ fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.

23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall discharge this Security Instrument. Borrower shall pay any recordation costs. Lender may charge Borrower a fee for releasing this Security Instrument, but

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only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law.

24. Subordination of Homestead and Waivers. If Borrower heretofore has ac- quired or hereafter acquires an estate of homestead in the Property, Borrower hereby agrees, to the greatest extent permitted by Applicable Law, that such homestead estate is subordinated in all respects to this Security Instrument and the amount due under the Note and to all renewals, extensions and modifications of this Security In- strument or the Note, and that said homestead estate is subject to all of the rights of Lender under this Security Instrument and the Note and all renewals, extensions and modifications of this Security Instrument and the Note, and is subordinate to the lien evidenced by this Security Instrument, and all renewals, extensions and modifications of this Security Instrument. Borrower waives and relinquishes all rights of cour- tesy and dower in the Property.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it.

Witnesses:

(Seal) - Borrower

[Space Below This Line for Acknowledgment]

MCLE, Inc. | 6th Edition 2017 3–67 Massachusetts Basic Practice Manual EXHIBIT 3N—Adjustable Rate Note

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MCLE, Inc. | 6th Edition 2017 3–69 Massachusetts Basic Practice Manual

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MCLE, Inc. | 6th Edition 2017 3–71 Massachusetts Basic Practice Manual EXHIBIT 3O—ARM Rider to Mortgage

ADJUSTABLE RATE RIDER (1 Year Treasury Index -- Rate Caps)

THIS ADJUSTABLE RATE RIDER is made this _____ day of _____, _____, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the “Security Instrument”) of the same date given by the undersigned (the “Borrower”) to secure Borrower’s Adjustable Rate Note (the “Note”) to _____ (the “Lender”) of the same date and covering the property described in the Security Instrument and located at:

[Property Address]

THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT THE BORROWER’S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MINIMUM AND MAXIMUM RATES THE BORROWER MUST PAY.

ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows:

A. INTEREST RATE AND MONTHLY PAYMENT CHANGES

The Note provides for an initial interest rate of _____%. The Note provides for changes in the interest rate and the monthly payments as follows:

4. INTEREST RATE AND MONTHLY PAYMENT CHANGES

(A) Change Dates

The interest rate I will pay may change on the first day of _____, _____, and on that day every 12th month thereafter. Each date on which my interest rate could change is called a “Change Date.”

(B) The Index

Beginning with the first Change Date, my interest rate will be based on an Index. The “Index” is the weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as made available by the Federal Reserve Board. The most recent Index value available as of the date 45 days before each Change Date is called the “Current Index,” provided that if the Current Index is less than zero, then the Current Index will be deemed to be zero for purposes of calculating my interest rate.

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If the Index is no longer available, the Note Holder will choose a new index which is based upon comparable information. The Note Holder will give me notice of this choice.

Before each Change Date, the Note Holder will calculate my new interest rate by adding _____ percentage points (the “Margin”) (_____%) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date.

The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the maturity date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment.

(D) Limits on Interest Rate Changes

The interest rate I am required to pay at the first Change Date will not be greater than _____% or less than _____%. Thereafter, my interest rate will never be in- creased or decreased on any single Change Date by more than one percentage point (1.0%) from the rate of interest I have been paying for the preceding 12 months. My interest rate will never be greater than _____% or less than the Margin.

(E) Effective Date of Changes

My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again.

(F) Notice of Changes

The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice.

B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER

Section 18 of the Security Instrument is amended to read as follows:

Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, “Interest in the Property” means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond

MCLE, Inc. | 6th Edition 2017 3–73 Massachusetts Basic Practice Manual for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Appli- cable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender’s security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender.

To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender’s consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing.

If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider.

(Seal) - Borrower

3–74 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3P—Condominium Rider to Mortgage

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3–76 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3Q—One- to Four-Family Rider to Mortgage

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3–78 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3R—Second Home Rider to Mortgage

MCLE, Inc. | 6th Edition 2017 3–79 Massachusetts Basic Practice Manual EXHIBIT 3S—Plot Plan

3–80 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3T—Attorney’s Certification of Title

CERTIFICATION IN ACCORDANCE WITH MASSACHUSETTS GENERAL LAWS, CHAPTER 93, SEC. 70, AS AMENDED

20__

To: THE MORTGAGEE, AND , THE MORTGAGOR(S)

RE: Mortgage of Property situated at

, hereby certifies that at the time of recording the above referenced mortgage, the Deed to the mortgagors, as well as the following additional documents:

Discharge of Mortgage(s) to:

Other:

The Mortgagee will hold a good and sufficient record first Mortgage to the property and the Mortgagor (s) will hold good and sufficient record title to the mortgaged premises free from all other encumbrances of record excepting only those matters set forth below:

1. Encumbrances set forth in the Mortgage, a copy of which is attached hereto:

2. Other:

BY:

We (I) have been informed that owners’ title insurance protection is available and choose to (not to) purchase such owners’ title policy. We (I) have been informed that Title Insurance Company and the firm retains a portion of the premium for its services in connection with the issuance of the policy.

We (I) have received a copy of the above.

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Insurance: $ Policy No.

Company:

Inception Date: Termination Date:

Holdback: $ Due:

Real Estate Tax Bill Paid: May 1, 20__ Nov. 1, 20__

Remarks:

File No.

3–82 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3U—Municipal Lien Certificate

MCLE, Inc. | 6th Edition 2017 3–83 Massachusetts Basic Practice Manual EXHIBIT 3V—Lead Paint Agreement

PROPERTY:

MORTGAGOR(S): LEAD PAINT AGREEMENT

In order to induce _____ to grant a loan secured by a mortgage covering the above captioned premises, the undersigned Mortgagors hereby acknowledge, represent and agree as follows:

1. That they have read and understood the attached summary of the lead paint law (Massachusetts General Laws c. 111, Sec. 197–199) and assume full responsibility for compliance with the law.

2. That _____ has made no independent inspection of the premises for lead paint and that the Bank relies upon Mortgagors to make any inspection and to take any other steps which may be necessary to protect their own interests as well as the interests of the Bank and of any other tenants and occupants of the premises. NOTE: Lead paint can be a serious hazard to younger children. We, therefore, urge you to have the premises inspected for lead paint if you suspect that it may be present, particularly in the case of an older building where the interior paint is flaking or peeling.

3. That they will promptly comply with any order validly issued by any court or authorized public official and with any request by the Bank with respect to the lead paint law and the correction or removal of any violation thereunder.

4. That they jointly and severally will hold its successors and assigns harmless and indemnified from and against any and all loss, claims or damages (including without limitation reasonable attorneys fees and any other reasonable fees and expenses incurred in connection therewith) growing out of or in connection with the lead paint law as it relates to the mortgaged premises and the agreements and representation herein set forth.

EXECUTED under SEAL and delivered to this _____ day of _____, 20__

3–84 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3W—Smoke Detector Notice

AFFIDAVIT

State of Massachusetts

County of _____

I (We) _____, having been duly sworn, declare and say that smoke detectors have been installed on each floor of the premises known and designated as _____, in the County of _____, State of Massachusetts, and that said smoke detectors are in good working order.

Executed as a sealed instrument this _____ day of _____, 20__.

Subscribed and sworn to before me on this _____ day of _____, 20__.

Notary Public My commission expires:

MCLE, Inc. | 6th Edition 2017 3–85 Massachusetts Basic Practice Manual EXHIBIT 3X—Seller’s Title Insurance Affidavit

AFFIDAVIT

State of Massachusetts County of Middlesex

I, We, Samuel Seller & Suzanne Seller having been duly sworn, declare and say that:

1. I, We am are familiar with the premises known and designated as 2 Home Street, Yourtowne, MA said land being situated in Yourtowne in the County of Middlesex State of Massachusetts;

2. There are no tenants, leases or parties in possession affecting the aforementioned premises;

3. We, I know of no work which would entitle one to claim a mechanic’s or materi- alman’s lien with regard to the aforementioned premises;

4. That all bills which could become liens pursuant to M.G.L.A. Chapter 551 of the Acts of 1980 (Municipal Lighting Plants—Real Estate Liens) have been paid; and

5. If the premises above referred to is a Condominium Unit, the undersigned hereby represent that they are familiar with any covenants of record which restrict the use of the Unit or the common elements of the Condominium and certify that there are no present violations of any covenants which restrict the use or the Unit and that to the best of their knowledge and belief there are no violations of any such covenants which restrict the use of the common elements.

This affidavit is given to induce First American Title Insurance Company to issue its title insurance policy or policies and _____ to take mortgages.

EXECUTED AS A SEALED INSTRUMENT this 15th day of May, 1994

Samuel Seller

Suzanne Seller

Subscribed and sworn to before me on this 15th day of May, 1994

Notary Public My commission expires:

3–86 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3Y—IRS Form W-9

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3–90 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3Z—IRS Form 1099-S and Instructions

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MCLE, Inc. | 6th Edition 2017 3–97 Massachusetts Basic Practice Manual EXHIBIT 3AA—IRS Nonforeign Affidavit

CERTIFICATION OF NONFOREIGN STATUS

Section 1445 of the Internal Revenue Cole provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform the transferee (buyer) that withholding of tax is not required upon my disposition of a U.S. real property interest, I, hereby certify the following: (Name of transferor)

1. I am not a nonresident alien for purpose of U.S. income taxation;

2. My U.S. taxpayer identifying number is ; and (Social Security Number)

3. My home address is

I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made here could be punished by fine, imprisonment, or both.

Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete.

Dated:

(Signature of Seller)

3–98 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3BB—UFFI Certificate

MCLE, Inc. | 6th Edition 2017 3–99 Massachusetts Basic Practice Manual EXHIBIT 3CC—Rescission Notice

NOTICE OF RIGHT TO CANCEL H-8 Remission Model Form General

1. Your Right to Cancel.

You are entering into a transaction that will result in a security interest in your home. You have a legal right under federal law and Massachusetts general law to cancel this transaction without cost, within three business day from whichever or the following events occurs last:

(1) the day of the transaction which is _____; or

(2) the day you received your Truth-in-Lending disclosures; or

(3) the date you received this notice of your right to cancel.

If you cancel the transaction, the security interest on your home is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that our security interest in your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction.

You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address shown. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation.

2. How to Cancel.

If you decide to cancel this transaction, you may do so by notifying us, in writing at

You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights.

If you cancel by mail or telegram, you must send the notice no later than midnight of _____ (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time.

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I WISH TO CANCEL

Customers Signature Date

The undersigned hereby acknowledge that each has received two copies of the Notice of Right to Cancel.

Customers Signature Date

MCLE, Inc. | 6th Edition 2017 3–101 Massachusetts Basic Practice Manual EXHIBIT 3DD—Ten Frequently Asked Questions

1. We just signed the offer; when can the movers come?

Generally when the buyer is getting an institutional first mortgage, the closing process should take eight to ten weeks (assuming there are no title problems). I would advise holding off on booking the movers for now, however, and wait to see if your transaction is indeed an average deal. The movers probably will not need much lead time, and you do not want to commit to a date you cannot honor.

2. Doesn’t the selling broker represent me as a buyer?

No. All brokers represent the seller unless they specifically are engaged as a “buyer’s broker.” You should have received a notice explaining this when you first began dealing with the broker in question.

3. Why can’t I take the chandelier and built-in bookcases?

They are fixtures and attached to the property in such a way as to make their removal impossible without altering the property. If you wish to take them, they must be de- leted from the purchase and sale agreement’s description of the premises to be sold, and any structural changes made must be remedied (i.e., the light fixture must be replaced with another, and the wall behind the bookcases repaired).

4. Why can’t we move in early/stay on after the closing?

Because you do not own it yet/anymore. If coordinating moving dates is a real problem, we can try to arrange for a use and occupancy agreement—but it should be in writing and address issues such as responsibility to insure, assumption of liability, possibility of damage to the property, and a contingency in the event that the owner has to evict in order to regain possession.

5. Who gets the interest on the deposit?

That is a matter for negotiation at the purchase and sale agreement stage. While both parties feel the money is theirs pending the closing (and both have good arguments to support such statements: the seller’s being that the money is part of the purchase price and is held in escrow only as a matter of custom; the buyer’s being that the money is held in escrow until the seller performs by delivering a deed), I suggest that we split the interest in half. (Considering the attorneys’ hourly rate, why waste the time haggling over a 4 percent return?)

6. What will our closing costs be?

It depends on the loan program offered by the lender. At a minimum, you should expect to pay one or two points; an application/credit report/appraisal fee of approx- imately $400, some of which may be prepaid; one year’s mortgage insurance (if applicable); and interest in advance for the balance of the month in which you close. In

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addition, the lender will collect the prepaid escrows for taxes (which when “netted out” against the tax adjustments will equal about three months’ worth), hazard insurance (usually for two months, based on the actual premium), and mortgage insurance if applicable (for two months, based on the actual premium). Depending on the lender and the program, there may also be charges for document preparation (usually $100), a tax service fee (usually $85), deliveries ($25–$30) and transfer of serving charges ($10—assignment; $5–certified copies).

The bank attorney will collect and disburse for recording fees ($125 for the deed and $175 for the mortgage, for a total of $300); title abstract ($150); municipal lien certificate ($25); plot plan ($150); title insurance; and his or her fee.

Note: All costs listed above are approximate.

7. What is title insurance and do I need it?

It is a policy of insurance that protects the lender and, if purchased by the buyer, the owner of the property from claims against the title to the real estate. While attorneys must certify to buyers that the title to the property is good, the owner will not be able to collect on such a certification if the attorney is gone or if the problem is one for which the attorney would not be liable, such as a forged document in the chain of title. In such an instance, the insurance policy would cover where the attorney would not.

8. What are “points”?

Points are fees charged to bank customers for the use of money. Although charged in many kinds of loan transactions, they are most commonly thought of in connection with residential lending. A point is calculated at one percent of the loan amount; thus, on a $160,000 loan to purchase a $200,000 house, one point would equal $1,600; one and a half points would equal $2,400; and two points would equal $3,200.

9. Why do I need you as my own attorney when the bank will have one and I have to pay for him or her anyway?

Because the bank attorney represents only the bank, and you pay him or her (usually $500 to $750) for that purpose only. Accordingly, unless an issue impacts on the validity of the security interest being given to the bank, its attorney will not get involved in aspects of a closing that are strictly between buyer and seller. No matter how good a lawyer he or she is, the bank’s attorney does not care about the terms of your purchase and sale agreement, whether or not the subdivision restricts the hang- ing of wash in the backyard, or the fact that the seller assured you that the last month’s rents were returned to the tenants and all security deposits were being held in the manner required by statute. Your own attorney will be concerned with all these matters and will also represent your interest if it should differ from the bank’s (for instance, if the loan terms change from those in the commitment letter to the loan documents at the closing).

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10. What is your fee and how do you arrive at it?

I usually charge a preliminary flat fee (such as $800) for the entire transaction, with the understanding that the fee can increase if problems arise. This figure is just an estimate, but I have some ideas on how the costs can be capped. For instance, if the client is willing to do some legwork (particularly in connection with comparing loan programs and terms at different banks) or forgo the attorney making some phone calls (such as to the broker to set up appointments for inspections, etc.), the client can save some fees.

It is advisable to send an engagement letter to your client so that there is no confu- sion as to your fee and the services you will be providing. If you have quoted a flat fee, your letter should confirm to the client that the fee contemplates a typical transaction, and that if this particular transaction requires significant additional time, the fee may be adjusted. You should make the client aware of typical incidental costs that are not included in the quoted fee, such as courier charges, recording costs, deed stamp tax costs to the seller, and title examination and title insurance costs to the buyer. Your letter should specifically set out that the services listed are those that will be provided, such as drafting and reviewing the purchase and sale agreement, reviewing condominium documents for a buyer, or preparing the deed for a seller. If you try to list services your representation does not include, you risk omitting from your list an issue that could expose you to future liability. Also, your client may assume that you are performing services that you are not.

3–104 6th Edition 2017 | MCLE, Inc. Buying and Selling a Home EXHIBIT 3EE—Bibliography

Statutes

Smoke/Carbon Monoxide Detector Law—G.L. c. 148, §§ 26D, 26F, 26F½

Certification of Title Law—G.L. c. 93, § 70

Lien Certificate Recordation Law—G.L. c. 60, § 23

Lead Paint Law—G.L. c. 111, §§ 190–199A

Consumer Protection Law—G.L. c. 93A

Tenancy by the Entirety Law—G.L. c. 209, § 1

Condominium Enabling Law—G.L. c. 183A

UFFI Law—G.L. c. 255, § 12I (repealed); G.L. c. 167, § 47

Rescission Law—G.L. c. 140D, § 10(a)

Books

Real Estate Bar Association for Massachusetts (REBA), Title Standards

Park, Real Estate Law, Massachusetts Practice Series, Volume 28A

Davis, Massachusetts Conveyancers Handbook

Lawyer’s Diary—Charts and Tables

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