Electronic Recording and Electronic Notarization

Electronic Financial Services Council

Standards and Procedures for electronic Records and Signatures (SPeRS)
City Club Washington, DC April 27, 2004
Carmelo D. Bramante Co-Chair of the Technology Committee Property Records Industry Association (PRIA)

PRIA Background
www.pria.us
The co-sponsors of the Property Records Industry Joint Task Force (PRIJTF), incorporated as PRIA, are the two national associations representing local property records government agencies:
The National Association of County Recorders, Election Officials and Clerks (NACRC); and The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT).

The PRIJTF is formally organized as a Committee of the NACRC since 1997; includes over 100 public and private sector members. PRIA incorporated in summer of 2002 as a 501c3 Non-Profit Corporation. The PRIA is a standards-setting body for both p and e and an education association for the real estate records industry.
Copyright 2004 Property Records Industry Association www.pria.us

PRIA Background
www.pria.us
The PRIA is a partnership effort with the private sector.
Private-Sector Participation in the PRIA include:
ALTA and Stewart Title / Landata Fannie Mae and Freddie Mac NIC-Conquest MERS, Digital Signature Trust (DST) National Notaries Association American Society of Notaries Ernst Publishing Ingeo, Aptitude Solutions, Bankers Systems Orion Financial, eOriginal, Exigent Computer Group Accutran, Lexus Documents, Realty Data other private sector firms
Property Records Industry Association www.pria.us

Copyright 2004

PRIA Background
www.pria.us

The PRIA has a policy making body, Executive Board, and the following committees: Standards, Technology, Property Law, Public Policy, and Education. The Executive Board is comprised of 4 members from each of the cosponsoring associations, 3 members from the private sector, and a number of advisory members from both the public and private sectors. Each of the committees is co-chaired by a County Recorder and a member of the private sector.

Copyright 2004

Property Records Industry Association

www.pria.us

PRIA Background
www.pria.us
The PRIA has published with following White Papers:

Revised Article 9-Model Notice Systems for Recording Offices; Document Formatting; and Indexing Grantee/Grantor Names Notarization

eRecording XML Document Type Definition (DTD) standard v.1.3

In late 2001, The PRIA Technology Committee has created alliances

with the MBAs MISMO and the Courts LegalXML organizations for the purpose of standardizing the use of XML and other technologies.
Copyright 2004 Property Records Industry Association www.pria.us

PRIA and MISMO Alliance

PRIA and MISMO / MBA

Alliance agreement
Joint review and adoption of data specifications Share resources for development and tracking of specifications Cross-membership Move toward implementation of SMARTDocs Preparing and testing schema Joint review and adoption of common security policies

Major Benefits

Alignment of technology standards Efficient use of resources Share information no surprises

Property Records Industry Association www.pria.us

Copyright 2004

Other PRIA Relationships

LegalXML
eCourt Filing Technical Committee eNotary Technical Committee

American Bar Association (ABA)

eTrust Workgroup

taken the place of LegalXML eNotary Technical Committee issues re: operating rules (OASIS/ABA/PRIA)
(NASS)

National Association of Secretaries of State

Notary Public Administrators

Notary issues Signatures, PKI, and Seals

Property Records Industry Association www.pria.us

Corporations and Identity Management

Copyright 2004

Where we are

eRecording DTD
v 1.2 published & synched with MBA/MISMO v 2.0 public comment period

eNotary DTD
published

Request/Response DTD
Public comment period

iGuide work continuing

(implementation guide for eRecording DTD)

Copyright 2004

Property Records Industry Association

www.pria.us

Where were going

Modularization of PRIA container elements in anticipation of schema iGuide completion Request / Response completion Compliance Certification

Copyright 2004

Property Records Industry Association

www.pria.us

PRIAs Future Steps

Continue e-recording and e-mortgage industry standards work

MBA / MISMO PRIA (NACRC/IACREOT) LegalXML

Local Government Education (PREP)

County Recorders State government

NCCUSL URPERA / PRIA URPERA Workgroup State notarial process and standards
Copyright 2004 Property Records Industry Association www.pria.us

What is Electronic Recording?

Electronic Recording redesigns the real estate recording

process. E-Recording initially redesigned the method of presenting real estate documents to the County Recorder and returning the documents to the closing agent, lender or mortgage servicer. The goal of electronic recording is to create efficiencies whereby costs are reduced for both the County Recorder and the Customer. However . . .
Copyright 2004 Property Records Industry Association www.pria.us

What is Electronic Recording?

. . . because federal E-SIGN and UETA allow for the replacement of paper and ink signatures with electronic records and signatures, other technologies may be introduced to the process to represent the real estate information to be recorded, i.e. scanned images, electronic documents, or electronic data (e.g., XML), which redesigns other processes within the Recorders office, such as document examination, indexing, and

collecting fees.
Copyright 2004 Property Records Industry Association www.pria.us

E-Commerce: Brief Legal History

State E-Signature Laws - e.g., Utah; 46 States State E-Recording Laws - e.g., CA, WA, VA State E-Notarization Laws - e.g., FL (repealed in 99), GA, UT,
AZ, WI, MN, NV, WA

1999-2004 NCCUSLs UETA - 45 States + DC 2000 Federal E-SIGN 2003-04 NCCUSLs URPERA
Copyright 2004 Property Records Industry Association www.pria.us

State E-Recording Laws

California (1995) Virginia (1996; amended in 2002) Washington (1997) Arizona (1999) Texas (1999) Missouri (1999) Arkansas (1999) Tennessee (2000)

Task Forces
Vermont California Texas Florida Utah
(Salt Lake County)

Iowa (introduced in 2000 & 2001)

Colorado (2002)
Copyright 2004 Property Records Industry Association

Minnesota Washington South Dakota Colorado Iowa Michigan Wisconsin

www.pria.us

E-Recording Models

About 35 counties doing E-Recording

3 Models of E-Recording
Model 1- Electronic transmission of scanned paper

Model 2 - Images with XML data wrapper

electronically signed images scanned paper

Model 3 - Digitally signed XHTML electronic files or records - SMARTdocs

Not all 3 Models realize every one of the following expected benefits:
Copyright 2004 Property Records Industry Association www.pria.us

Expected Benefits of E-Recording

Reduces Recording Time / Improves Throughput Reduces Errors due to Re-keying of Data Reduces Costs to all Parties Improves Productivity Reduces document fraud Standardizes processes and formats

SMART documents feed processes and systems

Uses open and non-proprietary systems and formats Improves customer service and satisfaction
Copyright 2004 Property Records Industry Association www.pria.us

 Copyright 2002-2004 PRIA.

Characteristics of Current ER Models

Model 1
WHERE LAW Document Type Signature Type Security

Model 2
Broward County, FL Oakland, MI
UETA / E-SIGN legal framework Electronic Loan Closings Electronic Documents - TIFF Images Electronic Signatures (holographic signing/stylus and e-pad) Digital Sig and Cert (Closing Agent and Recorder) / SSL (Transmission)

Model 3
Salt Lake County, UT Fairfax County, VA
UETA / E-SIGN / VA + UT State Law 1 Electronic File: Lien Releases XHTML = XML data + HTML format Digital Signatures & Certificates (signers, notary and Recorder)

Orange County, CA Maricopa County, AZ

CA / AZ State Recording Statute Paper Closings

Ink Signatures for borrowers and notary

T-1 Line/VPN (CA) and VPN (AZ)

Digital Signatures and Certificates SSL (Transmission) Title Cos./Lenders prepare lien releases Title companies / loan closers scans paper Title - Closing Agent / Lender; 2 files Preparer & transmits images TIFF images and XML data encrypted XHTML = XML data + HTML format Traditional processing; but no paper. Recorder exams, records and stores All processes can be automated, TIFF; automated indexing by extracting including examination and indexing; Recorder Recorder exams, records, indexes and stores TIFF images. XML data (QC process only) or, Recorder can choose manual processing. Recorder transmits recorded TIFF Recorder transmits recorded TIFF System produces recorded XHTML file Recorded (burned) copy; label data sent also for (burned) copy to preparer accessed for preparer; converts recorded XHTML Document paper docs via electronic vault file to TIFF for storage
Payment

Draw-down or escrow account for payment

Draw-down or escrow account for payment

Draw-down / escrow account / debit account / ACH transaction

eRecording Today
35 jurisdictions now ER enabled

Dakota MN Maricopa AZ Washoe NV Orange CA Lancaster PA San Mateo CA Salt Lake UT Riverside CA San Bernardino CA Utah UT Fairfax VA Broward FL Racine WI Cook IL Washington WI Dupage IL Milwaukee WI Oakland MI Washington D.C. Lyon MN Boulder CO Duval FL Wayne MI

Douglas CO Orange FL Denton TX Tarrant TX Mecklenburg NC Macomb, MI Renville MN Cache UT Boone MO Snohomish WA Dane WI Brown WI

eRecording in 2004
Counties planning to do ER this year
Franklin OH Philadelphia PA Cuyahoga OH Miami Dade FL Denver CO Hennepin MN Roseau, MN Palm Beach FL Pinellas FL Polk FL Seminole FL St. Louis MO Miami Dade FL King WA Pierce WA Chippewa WI Clark WI Kenosha WI Portage WI Waupaca WI

eRecording Today

eR Real Estate Documents

satisfactions or lien releases majority of todays counties doing eR closing docs no more than 6 counties other docs, e.g., assignments a couple of counties

State of Recording Technology

Indexes On-Line

Internet Access

e.g., Baton Rouge and Jefferson Parish, LA e.g., Hamilton and Cuyahoga Counties, OH e.g., Marion County, IN

Real Estate Documents On-Line (and indexes)

e.g., Maricopa County, AZ e.g., Mesa County, CO

Mapped Data (GIS) On-Line

Green County, OH
Property Records Industry Association www.pria.us

Copyright 2004

E-Recording Issues
Development and implementation of industry standards:
XML and electronic file format e-signatures security & PKI data packaging (e-packaging) transmission protocols (e-messaging)

E-Recording Systems Development and Deployment

Connectivity with Industry Infrastructure

Market adoption and use
Copyright 2004 Property Records Industry Association www.pria.us

E-Recording Issues

Uniformity of State Recording Statutes

NCUSSL - URPERA

State eNotarization Requirements Budget / Technology Deployment Adherence to Standards Universal Electronic Payment (for Recording Fees)
Copyright 2004 Property Records Industry Association www.pria.us

Possible eRecording Issues for SPeRS

eRecording Authority under UETA and/or ESIGN eNotarization

Stamps and Seals eSignatures eNotaries Types Level of Authentication Recording Fees State and Local Taxes, and other Conveyance Payments

eSignatures (includes educating lenders, title and recorders)

ePayment

Receipt and Confirmation under UETA and/or ESIGN

Copyright 2004 Property Records Industry Association www.pria.us

Possible eRecording Issues for SPeRS

Creating electronic originals from scanned paper (level 1 and

2 of eRecording) destroying the signed paper originals

Papering out to the Lender from electronically recorded records Papering out to the Recorder from electronically signed records Race to Record issue, specifically for closing transactions Handling hybrid transactions Real Estate / Mortgage Fraud Privacy

Copyright 2004

content, e.g, SSN on eRecords transport, e.g., hackers

Property Records Industry Association www.pria.us

Thank You !

Q&A
www.pria.us