Minnesota Electronic Real Estate Recording Task Force December 13, 2001

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 The Old WayThe New Way Document created Title officer signs document Notary signs document (if applicable) Documents submitted to recording office Documents recorded and returned 30 seconds later

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

eRecording Overview 4 main steps to eRecording: 1.Document prepared for submission 2.Reviewed by eRecording software at server level –Document either accepted for recording or rejected and sent back to submitter. 3.Document recorded in the county recording system 4.Recorded document returned to submitter with recording number, date, time and fees charged to account

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

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.

.tif Grant Deed Scanner Text Database Images XML Recorder Level 1

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

Level 2 Document Submitter Hand-keyed XML data tags + XML Recorder TextImages Database Microfiche Grant Deed

Level 3: Electronic Document Document has “digital” signatures Submitter creates the document in a XML template or form Data does not have to be re-indexed

Intelligent Document Level 3 Submitter creates document Recorder Text Images Database Microfiche, if desired

What Does a Submitter Need to eRecord? Computer Internet Access Digital signature Submission Software Digitized signing pad Scanner

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

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

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

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.

Step 3: Document Recorded in County’s 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

What You’ll 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.

XML Server Text Database Images Recorder Document Accepted Automatically Recorded Document:  Recording label with all information  All cashiering and reports  Index detail  Document images without scanning What is Automatic? Everything!

What Does a County Need to eRecord? eRecording server eRecording software Integration with county’s recording system

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 submitter’s account A submitter can easily have the recorded document back in less than 30 seconds!

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

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

Questions to Consider for an eRecording System 1.Do digital signatures need to be validated by the county? 2.Do digital signatures on documents that were created within a title company need to be validated by the other signers in title companies? 3.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? 4.Does the county need to keep the original binary file?

Questions to Consider for an eRecording System (con’t.) 5.What specific digital signature information needs to be on the face of the document? Hash marks, names, dates, times, certificate numbers? 6.When a document is electronically created, what is the original? What does the originator do with the document they created? Does this distinction matter? 7.Who is going to pay for eRecording? 8.What laws exist in your state that would create a barrier to eRecording? What legislation will have to be enacted? 9.Open architecture? What does that mean? How open is open?

Questions Answered by eRecording Pilots 1.Will document submitters use eRecording? YES! –County’s 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 2.Why will document submitters use eRecording? –Document submitters will use eRecording as long as it offers them time and cost savings

Questions Answered (cont) 3.Does eRecording save time? –YES! For both recorder and submitter 4.Is eRecording accurate and reliable? –YES! Technology supports a secure and reliable connection. The integration with the recording system is seamless and consistent.