156 Hamilton St., Leominster, MA

Enacted in 1994 “The Good Funds Statute” addressed the situation that first arose in the Abbey Financial case, where a lender failed to fund a loan which had already closed, the closing attorney was left in the difficult position of either having closed the loan and refusing to record the papers or having recorded the deed and mortgage and not having the funds to pay off the seller and existing liens. In the case of Abbey Financial, several of the attorneys representing Abbey closed the loan and recorded the papers, including the mortgage, without having the necessary funds to payoff the seller or the existing liens.

The Good Funds Statute M.G.L. c.183, § 63b provides that no mortgagee who makes a loan to be secured by a mortgage, shall cause a mortgage to be recorded with the Registry of Deeds unless prior to the time the mortgage is recorded, the mortgagee has caused the full amount of the proceeds of such loan due to the mortgagor, the mortgagor’s attorney or the mortgagee’s attorney in the form of a certified check, bank treasurer’s check, cashier’s check or transfer of funds. The statute further provides that neither the mortgagor’s attorney or the mortgagee’s attorney shall be required to make disbursements or deliver said proceeds to the mortgagor in such form. The primary purpose of the “Good Funds” statute was to allow consumers and conveyancers to rely on funds at a closing.