Minnesota Electronic Real Estate Recording Task Force

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Minnesota Electronic Real Estate Recording Task
Force

• December 13, 2001

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The Old WayThe New Way
The Old Way
The New Way

• Document created
• Title officer signs document
• Notary signs document (if applicable)
• Documents couriered to recording office
• Documents mailed or handed back days/weeks later

• Document created
• Title officer signs document
• Notary signs document (if applicable)
• Documents submitted to recording office
• Documents recorded and returned 30 seconds later

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eRecording Terminology

• Wet Signature
• Digitized Signature
• Public Key Infrastructure (PKI)
• Extensible Markup Language (XML)
• XML Wrapper
• Certificate Authority

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eRecording Overview

• 4 main steps to eRecording
• Document prepared for submission
• Reviewed by eRecording software at server level
• Document either accepted for recording or
  rejected and sent back to submitter.
• Document recorded in the county recording system
• Recorded document returned to submitter with
  recording number, date, time and fees charged to
  account

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Step 1 Document Preparation

• Determine document current form
• Level 1 - Paper Document
• Level 2 - Freeform Electronic Document
• e.g created in MS Word or Word Perfect
• Level 3 - Electronic Document
• indexing fields already identified
• index data values generated as the form is
  completed
• XML current standard for level 3 documents

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Level 1 Paper Document

• Must be scanned and transmitted as a .tif image.
• Wet signatures scanned and saved as .tif image on
  users computer
• Pertinent document fields indexed into XML
  wrapper so index data fields will auto-populate
  in recording system.

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Level 1
Recorder
Text
Images
Database
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Level 2 Freeform Electronic Document

• Document has a digital or digitized signature
  
• Pertinent document fields indexed by submitter
  into XML wrapper so index data fields will
  auto-populate in recording system

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Level 2
Document Submitter
Recorder
Text
Images
Hand-keyed XML data tags
Database

Grant Deed
Microfiche
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Level 3Electronic Document

• Document has digital signatures
• Submitter creates the document in a XML template
  or form
• Data does not have to be re-indexed

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Level 3
Recorder
Submitter creates document
Text
Images
Database
Intelligent Document
Microfiche, if desired
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What Does a Submitter Need to eRecord?

• Computer
• Internet Access
• Digital signature
• Submission Software
• Digitized signing pad
• Scanner

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Step 2 Document Submitted Reviewed

• eRecording software reviews the document and/or
  the XML wrapper for the required recording
  information
• Document type
• Page Count
• Grantor/Grantee Name
• Legal Description, if applicable
• Cross Reference number, if applicable
• Existence of digital or digitized signature for
  level 2 and 3 documents

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What Else is eRecording Software Checking For?

• Funds available in escrow account
• Business partner authorized to electronically
  record documents with the county
• Level 2 documents reviewed for physical document
  standards such as margin widths and header/footer
  widths

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Validation Check

• Accepted Document
• Automatically recorded and returned to submitter
  w/ county stamp
• Rejected Document
• Entire package sent back to the submitter with an
  explanation of why the document failed

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Security During Document Transport

• Handled via Secured Sockets Layer (SSL)
• SSL provides authentication, data integrity, and
  data privacy. 
• Authentication
• SSL relies primarily on digital signatures and
  certificates. 
• Data integrity
• SSL appends a checksum to each transmitted
  packet. 
• Data privacy
• SSL encrypts the data in each packet sent over
  the wire.

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Step 3 Document Recorded in Countys Recording
System

• Level 1 document - Clerk reviews .tif image
• Accepted document recorded
• Rejected document sent back to submitter
• Level 2 3 documents automatically validated
  by eRecording software and recorded

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What Youll See in Your Recording System

• Recording label on the face of document with
• recording number
• document type
• page count
• Date
• time of recording
• county name
• Recording number up the left hand side of all
  pages
• All cashiering will be done automatically,
  including fees withdrawn from escrow accounts,
  transactions noted on customer account
  statements, receipt creation, and updates to the
  financial reports
• Images automatically created -- No scanning
  necessary
• Index detail auto-populated. All that is left is
  review of index in the verification queue.

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What is Automatic? Everything!

• Automatically Recorded Document
• Recording label with all information
• All cashiering and reports
• Index detail
• Document images without scanning

Recorder
Server
Document Accepted
Text
Images
Database
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What Does a County Need to eRecord?

• eRecording server
• eRecording software
• Integration with countys recording system

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Step 4 Document Returned to Submitter with
Recording Information

• Once a document is recorded, an image is returned
  to the submitter with the following information
• Recording number
• Number of pages recorded
• Time and date of recording
• Amount charged to submitters account
• A submitter can easily have the recorded
  document back in less than 30 seconds!

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Legislation

• President Clinton signed the Electronic
  Signatures in Global National Commerce Act
  (a.k.a. e-Sign) into law on June 30, 2000
• Results of this act include
• A national standard for using electronic
  signatures.
• Electronic signatures legally authorize contracts
  for mortgages, loans, insurance policies
• Removes legal impediments to electronic commerce
• Provides businesses with a predictable,
  technology-neutral, legal environment
• Ensures on-line consumers will have legal
  protection equivalent to the off-line world
• This Act went into effect on October 1, 2000

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Legislation

• e-SIGN is expected to bring widespread changes to
  the way government does business
• On-line transactions previously requiring a
  hard-copy signed document (i.e. permits,
  purchases, payments, recordations, etc.)
• Store transaction records electronically
• Recording a variety of legal documents
• including full and/or partial reconveyence,
  leases, liens, contracts, notices of interest,
  etc., online and real-time.
• e-SIGN will drive Accelerated Business Closures
  impacting over 1 trillion in transactions per
  year

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Questions to Consider for an eRecording System

• Do digital signatures need to be validated by the
  county?
• Do digital signatures on documents that were
  created within a title company need to be
  validated by the other signers in title
  companies?
• Do digital signatures need to be stored in a way
  that they can be validated in the future? What
  happens if a certificate authority goes out of
  business?
• Does the county need to keep the original binary
  file?

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Questions to Consider for an eRecording System
(cont.)

• What specific digital signature information needs
  to be on the face of the document? Hash marks,
  names, dates, times, certificate numbers?
• When a document is electronically created, what
  is the original? What does the originator do with
  the document they created? Does this distinction
  matter?
• Who is going to pay for eRecording?
• What laws exist in your state that would create a
  barrier to eRecording? What legislation will have
  to be enacted?
• Open architecture? What does that mean? How open
  is open?

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Questions Answered by eRecording Pilots

•  

• Will document submitters use eRecording?
• YES!
• Countys goal will be to get submitters to use
  eRecording for the vast majority of the documents
  recorded
• Software must have the ability to accept all
  three file types (smart forms, TIFF images and
  freeform word documents)
• eRecording software should allow for the filing
  of every document type in the county
• Why will document submitters use eRecording?
• Document submitters will use eRecording as long
  as it offers them time and cost savings

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Questions Answered (cont)

• Does eRecording save time?
• YES! For both recorder and submitter
• Is eRecording accurate and reliable?
• YES! Technology supports a secure and reliable
  connection. The integration with the recording
  system is seamless and consistent.