eRecording, eNotarization Continue Digital Journey

MBA (3/20/2008 ) Palaparty, Vijay
DALLAS—The eMortgage world continues to build stronger infrastructure and gain support through recent eRecording and eNotarization developments. Technological progress varies given the traditional paper-oriented nature of notarial and recording practices.
Mark Ladd, technology committee coordinator at the Property Industry Records Association, outlined three models of eRecording here at the Mortgage Bankers Association’s National Technology in Mortgage Banking Conference & Expo. The first model, scanned paper, has been adopted by 43 counties in the U.S. Model 2 scans paper that combines XML data.

“The scanned image is married up with XML indexing data for the county recorder to populate their database,” he said. “It’s packaged and some of the process is automated. Currently 233 counties work with Model 2.”

Seventy-seven counties have adopted a fully electronic document, Model 3, which is a rendered image that is integrated with XML data. “It’s the most powerful automation and paradigm shift—both culturally and technologically,” Ladd said. “It’s about taking the document and digitizing it. However, most often this doesn’t require re-education because closing agents are already electronically storing documents for their own internal sake. We are seeing a lot of traction in this space. Counties that have adopted Model 3 are seeing six percent to eight percent of documents come in electronically. Model 2 is seeing a 50 percent to 60 percent rate of participation.”

eRecording submission methods include a single source point-to-point where vendors provide both submitter and recorder software for preparing and recording eDocs, respectively. An agnostic recording receiver method also exists, where the recorder accepts documents from anyone who conforms to a published standard.

Statewide portals have also emerged—the first, a private sector portal with a single point of entry for all counties supported by a designated portal vendor; and second, recorder-led initiatives where a single point of entry exists for all counties in a particular state. Iowa, New Jersey and Missouri are in production phase of adopting recorder-led initiative. North Carolina, Pennsylvania, Colorado and California are in study and planning phases.

“All document formats and implementation are based on PRIA data and MISMO standards,” Ladd said. “Data standards are interoperable.”

Scheme based version 3.x is under development, which coordinates with MISMO’s core data structures and architecture workgroups, Ladd said.

“The MISMO and Mortgage Bankers Association alliance offers major benefits in the alignment of technology standards such as the efficient use of resources and in the sharing of information,” Ladd said. “It allows joint review and adoption of data specifications, sharing resources for development and tracking specifications, cross-memberships, preparing and testing schemes and joint review and adoption of common security policies.”

Darren Ross, director of eNotarization services and development at the National Notary Association, detailed progress toward eNotarization. “Notaries provide audit trails and electronic services to provide a better transaction for customers, businesses and government,” he said. “They provide better protection from fraudulent transactions and also more assurance and integrity of the notarial acts performed, along with the legal enforceability of such transactions.”

The security tenets of a paper-based notarization hold in the electronic version as well, Ross said. “Security tenets include the physical presence, which is the core of the transaction; requirements, which are different for every jurisdiction; the identification process of what is required; and then willingness and acknowledgment. It’s no different in electronic notarization,” he said.

Electronic notary seals (ENS) and digital certificates have emerged in the push for efficiency. “It’s the electronic counterpart to the notary’s pen and ink seal,” Ross said. ENS is accredited and has security measures built in such as tamper evident notifications.

“The benefits of ENS regulates notaries in the electronic age, supports eNotarization statewide, facilitates certification of documents between states and nations and deters fraud,” Ross said.