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Protecting Homebuyers in Massachusetts

Protecting Homebuyers in Massachusetts. HB904 will deprive homebuyers of legal protections by limiting their access to legal advice when purchasing a home. . H904 will allow non-attorneys to provide legal services to homebuyers.

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Protecting Homebuyers in Massachusetts

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  1. Protecting Homebuyers in Massachusetts

  2. HB904 will deprive homebuyers of legal protections by limiting their access to legal advice when purchasing a home. • H904 will allow non-attorneys to provide legal services to homebuyers. • HB904 sponsored by Title/Appraisal Vendor Management Association, an out-of-state trade association.

  3. A house is the largest investment most families will ever make. • 6 in 10 homeowners have more home equity than stock wealth, according to a recent study published by the Joint Center for Housing Studies of Harvard University. • In 2004, there were more than 70,000 single family homes and condos purchased in Massachusetts!

  4. Massachusetts public policy seeks to protect homebuyers during these transactions. • The process of closing a real estate transaction is defined by Massachusetts statute and case law as the practice of law. • State law requires that an accountable, knowledgeable, state-licensed attorney must perform closings. • Two recent court decisions affirmed this statute.

  5. Attorneys turn homebuyer protections into reality. • Explain complex legal documents that are part of everyday closings • Professional licensing requirements to ensure competency • Clients’ Security Fund to indemnify client losses • Attorneys’ errors and omission insurance coverage • Title, practice, ethical and educational standards • Maintain integrity in the public land record registries

  6. HB904 will drop these protections. • Non-attorney closing companies are unregulated and focus only on profits, not legal protections. • To permit lenders, banks, title insurance companies, real estate brokers (venture capital firms even!) to perform the functions of closing attorneys is an open invitation for increased homebuyer fees.

  7. Competitive environment means attorneys are charging homebuyers less than ever. • Consumers pay lower attorney closing fees now than 1975! • 6,000 real estate attorneys in Massachusetts = robust, competitive marketplace for homebuyers • HB904 proponents falsely claim bill will drive down closing costs.

  8. HB904 will slash legal aid budgets – requiring a Legislative fiscal bailout. • Last year, IOLTA provided $15 million for local legal aid programs. • 80% of all IOLTA funds are generated by real estate attorneys. • Non-attorney companies don’t use IOLTA accounts and will pocket this money as profits. • Mass Lawyers Weekly called the bill “an ambush – an attack that could undo years of work…”

  9. Our courts, laws and the Attorney General have all sided with homebuyers against HB904. “In short, having attorneys involved protects consumers. To me, that’s the bottom line. And it truly does protect consumers’ bottom lines. For that reason, I strongly oppose this legislation as it would take this level of security away from consumers.” • Attorney General Tom Reilly

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