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Mechanics of Electronic Recording
Presented byTodd R. HougaardPresident & CEO
Doing Business with Digital Documents
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A Discussion on … Technology
and
Policies
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Processes/Policies
Electronic Recording is ...30% - Technology70% - Policy
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Presentation Outline
Legal Requirements A Review of Electronic Recording TechnologyProcesses and PoliciesDefining Electronic Recording PoliciesSecurityDemonstration
Mechanics of Electronic Recording
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Legal Requirements
Doing Business with Digital Documents
Enforceable?
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Legal Requirements
Uniform Electronic Transactions Act (UETA)
Currently adopted by 24 states (as of 3/01)In consideration by additional 22
Electronic Signatures in Global & National Commerce Act (E-SIGN)
Signed June 2000In effect October 2000
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Legal Requirements
StateLawsPoliciesGuidelines
Fraud and Forgery DeterrenceSecurity of Digital Documents
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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A Review of
Electronic Recording
Doing Business with Digital Documents
Flash from the past!
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eDocument Technology
Paper Era (1630-1950)Printed FormTypewriter
Modern Era (1950s)Microfilm/Microfiche
Computer Era (1970-2000)Computerized IndicesComputer Imaging
Paperless Era (2001 +)XHTML—Data/Display FormatDigital SignaturesLegal acceptance of Digital Documents
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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eDocument Technology
XMLPDFTIFXHTML
WordRTFWord Perfect
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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eDocument Technology
XHTML - (XML & HTML)eXtensible Markup Language • Readable by computers
HyperText Markup Language • Code used to view an internet page• Readable by human eyes
Combination Creates “Smart” Documents
• Humans and computers can read
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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eDocument Technology
XHTML (digital documents)Human View
DEED OF RECONVEYANCE Lot 21, Murray Bluffs Subdivision, according to the official plat thereof, on file in the office of the Salt Lake County Recorder. 21-23-153-001
Computer View<InstrumentType code="Recon">DEED OF RECONVEYANCE</InstrumentType><LegalDescList><LegalDescBlock LDidref=""><Lot Rcrd="" fill="textbox" tooltip="Lot">Lot 21,</Lot><Subdivision Rcrd="" fill="textbox" tooltip="Subdivision">Murray Bluffs Subdivision,</Subdivision><Township Rcrd="" fill="textbox" tooltip="Township/Block"></Township><Range Rcrd="" fill="textbox" tooltip="Range/Plat"></Range><Section Rcrd="" fill="textbox" tooltip="Section"></Section><QtrSection Rcrd="" fill="textbox" tooltip="Quarter Section"></QtrSection><QtrQtrSection Rcrd="" fill="textbox" tooltip="Quarter Quarter Section"></QtrQtrSection><Meridian Rcrd="" fill="textbox" tooltip="Meridian"></Meridian><LegalDesc Rcrd="" fill="textarea" tooltip="Legal Description"> according to the official plat thereof, on file in the office of the Salt Lake County Recorder.</LegalDesc><ParcelNo Rcrd="" fill="textbox" tooltip="Parcel Number">21-23-153-001</ParcelNo></LegalDescBlock></LegalDescList>
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Electronic Signature Choices
Typed Dear Customer,
It has been our pleasure to serveyou. We eagerly anticipate a successful project. We will contact you next week to schedule a launch meeting.
Sincerely,
Todd Hougaard Digital Certificate File- Public Key
<Certificate Base64value= "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
DBIAkEA1LD07KIbyqmOx+sUT5QKZMR8gZDtG3rDK6ii8xirrYccLQDbyttNGTYGzqTJ3Fmpi4PIAdvdJRoFlekKZMDXDwIDAQABo4ICvjCCArowCwYDVR0PBAQDAgG4MB0GA1UdDgQWBBR1gTtWveVR06WuBi4E6jfRQMl+eTCB6gYDVR0jBIHiMIHfgBR
MCjynfXFEa5YD9zbL9QuKrw8CX6GBtKSBsTCBrjELMAkGA1UEBhMCVVMxCzAJBgNVBAgTAlVUMRcwFQYDVQQHEw5TYWx0IExha2UgQ2l0eTEeMBwGA1UEChMVVGhlIFVTRVJUUlVTVCBOZXR3b3JrMSEwHwYDVQQLExhodHRwOi8vd3d3LnVzZXJ0cnVzdC5jb20xNjA0BgNVBAMTLVVUTi1VU0VSRmlyc3QtQ2xpZW50IEF1dGhlbnRpY2F0aW9uIGFuZCBFbWFpbIIQK9X1D5N3tYtN+Roe7WIsgzAdBgNVHSUEFjAU
BggrBgEFBQcDAgYIKwYBBQUHAwQwDAYDVR0TAQH/BAIwADBXBgNVHR8EUDBOMEygSqBIhkZodHRwOi8vY3JsLnVzZXJ0cnVzdC5jb20
vVVROLV
Digitized – UPS or FEDEX
Digital
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Digital Signatures
How…Mathematical Equations Documents Read by Computer as Numbers Example: Todd = 1001110000110
Digital CertificateTwo Very Large Prime Numbers• Private key – Known only by the person
signing• Public key- Used to “unlock” a signature and
validate
Authenticated by Certificate Authorities
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Digital Signatures
How do I digitally sign a document?• Legal
Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Digital Signatures
How is a digital signature verified?• Legal
Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Digital Signatures
Digital Signatures Provide…Signer Identity Document Integrity “tamper proof”Formal Legal Compliance Equivalent to InkEfficiency – Computer examination
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Digital Signatures
Ingeo Educational Series• Legal
Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes and
Policies
Doing Business with Digital Documents
In Context!
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Processes/Policies
MISMO- Banking and Mortgage IndustryAARTT- Alliance for Advanced Real Estate Transaction TechnologyProperty Records Industry Joint Task Force – NACRC/IACREOTCalifornia XML Standards GroupLegal XML
Note: Corporate Techies
Standards Groups• Legal
Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Recording StakeholdersRecordersNotariesSignerJudgesLarge LenderLarge Volume Loan ServicerGeneral PublicLocal Government OfficeTitle Insurance UnderwriterTitle Plant Operator
Prosecuting AttorneyClosing AttorneySystem ProvidersSmall LenderSmall Volume Loan ServicersDBA Filings – BusinessState Tax OfficesMisc. Private SectorIRS Tax Lien Office
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Stakeholder InterestsIntegrity of recordRecord permanenceSecurityNon-proprietaryAccess to recordsTrust
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Recorder’s CustomersClosing Attorneys and AgentsTitle AgentsTitle PlantsNational Mortgage Lenders • Top 10 do 55+% of all mortgage lending
National Mortgage Servicers Local/Regional Banks and Credit UnionsOther Government offices • Treasurer• IRS• State Tax
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Customers’ InterestsEase of adoptionBenefits • Automation• Increased efficiency• Competitive advantage
Uniformity – multiple locations
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
UETA requires that parties “agree on how to do business” …
Law = broad boundariesMust define and agree on industry policies Policies are not laws • Policies define guidelines
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Defining Electronic Recording Policies
Doing Business with Digital Documents
But we’ve always done it this way!
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Defining Policies
File Format CriteriaPresentation/Viewing/Display• Proprietary vs. Open• Processing ability/Performance• Records Quality/Permanence/Archive
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Defining Policies
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Defining Policies
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Defining Policies
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/PoliciesHigh Difficulty
High
Low Difficulty
Low
Closing Attorneysand Agents
Title Agents
Nat’l Mortgage Lender
Nat’l Mortgage Servicer
Local/Regional BanksTreasurer
IRSState Tax
Title Plants
• Automation• Increased Efficiency• Competitive Advantage
• Fit Existing Systems• Training Requirements• Access
Ease of Adoption
Benefits
Customer Considerations
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Proprietary Adobe Vendor Dependent W3 Internet Standard
Longevity mid 1980’s Vendor Sys Dependent 1960’s
Doc Data Source Typist Data Linked to Doc Data Contained in Doc
Automation Ability No Scanning Data Entry Complete End-to-end
Processing Speed Typist Speed Depends Processor Speed
Print/Display Tools TIF Viewer Vendor Internet Browser
TIF Multi-File XHTML
eDocument Considerations• Legal
Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Electronic Signature Policy
Purpose of Signatures*EvidenceCeremonyApprovalEfficiency and Logistics
*American Bar Association
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Electronic Signature Policy
“The statute of frauds of the common law tradition, for example, does not render a transaction invalid for lack of a “writing signed by the party to be charged,” but rather makes it unenforceable in court …”
American Bar Association
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
DocumentAuthentication
High Difficulty
High
Low Difficulty
Low
Digital
Digitized
Typed
SignerAuthentication
Electronic Signature Policy
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Processes/Policies
Easy toAccess
High
High
Low
LowTransport
Recorder(Licensed CA)
Self-Generated
Trust
Digital Certificate Policy
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
LicensedNotary CA(ARCANVS) Signer
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Processes/PoliciesDocument Integrity Policy
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Security
Doing Business with Digital Documents
Just how secure is it?
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System Security
Receiving system isolated from other systems?Protected against system failures?
Disaster Recovery
EncryptionTransmitter Identity
• Legal Requirements
• ReviewElectronicRecording
• Processes and Policies
• DefiningPolicies
• Security
• Demonstration
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Thurston County, WACounty
County Recorder, County Records Manager, RecordingAssistants, County IS/IT Staff
Title CompaniesChicago TitlePioneer TitleTransnation
Certificate AuthoritiesDigital Signature Trust Co.ARCANVS
County Software VendorEagle Systems
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Paper
2-42+ days, 2-42+ days, Some errorsSome errors
Prepare documents(5-10 minutes)
Execute documents & fee prep (5 minutes)
Delivery (½ to 5 days)
Recorder processing (½ to 21+ days)
Return delivery (½ to 5 days)
Enter documents into system(½ to 21 days)
The Value of Time
Prepare documents(5-10 minutes)
Execute documents & fee prep(5 minutes)
Delivery(< 3 seconds)
Recorder processing(< 20 seconds)
Return delivery(< 3 seconds)
Enter documents into system(< 10 seconds)
Electronic
< 15 minutes, < 15 minutes, Minimal errorsMinimal errors
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Demonstration