1. FSTC Bank Technology and Operations Committee
Electronic Signatures and Records

2. diverse market verticals
Today’s Discussion
Today there are many applications of electronic signing and electronic records in
diverse market verticals
What is happening in vehicle retail sales and mortgage lending, what are some of the issues, and what could be potential areas of interest for the
FSTC BTO Committee

3. Issues to Consider
Verticals deploying own infrastructure, unique standards. How do the verticals interoperate? Can the technology requirements be standardized to support multiple vertical applications?
How do you measure the payback? Increased accessibility, transparency, process efficiencies, environmental?
Standardization efforts are vertically oriented, grouped in three areas
Operating Model – is the lifecycle complete (e.g., collections)
Business Model
Technology - can requirements be standardized to work across verticals?
Federal government deploys electronic signature/records across agencies and DOD, does this fit the private sector?
What is the connection between e-Sign and identity management technologies? Should authenticated identity information be used in e-sign applications?
Longevity
Record archive period likely to outlive technical applications
Bridging technology into the future
Consistency in acceptance of eRecords by states, municipalities, businesses
6. Contradictory federal (ESIGN) and state (UETA) statues may be hindering domestic deployment.

4. eSignatures and eRecords
Electronic signatures and digital signing may be acceptable
Electronic documents and records very different from electronic signing
Multiple vendors providing application solutions for both electronic signing and records
Silanis
eOriginal
AlphaTrust
Docusign
SIGNiX
AssureSign
CursiveOnLine
Do vendor solutions satisfy diverse market application needs and cross verticals?

5. VEHICLE RETAIL SALE and LEASE
Mark Zalewski, AFSA

6. Existing Work Applications National Standards Electronic Contracting
Retail automotive sales and lease programs
Online vehicle financing
Online vehicle sale
Electronic Vehicle title and lien recordation
National Standards
Formats - ANSI X9.103: 2004 “Electronic Contracts
Business Processes - ANSI X9.110: 2007 “Transfer of Location of Electronic Contracts”
Time Stamps - ANSI X9.95: 2006 Trusted Time Stamp
Behavior Guidelines - X9 TR4: 2003 – SPERS

7. eContract for Vehicle Sale and Lease is two years old
100% Chrysler dealers offer eContract since 1Q07
DealerTrack and RouteOne offer eCredit application and eContracts
100% Toyota portfolio eContract since 2007
“Build your own Toyota “ at toyota.com
5% last Chase Automotive securitization eContracts
Direct-to-Consumer eContracting and funding auto loans at TitleMyCar.com

8. e-Titles - ELT (Electronic Lien and Titling) of Motor vehicles
The electronic exchange of vehicle lien recordation and title information where the state computer record is the record rather than the paper title is the title of record.
National Motor Vehicle Title Information System (NMVTIS) contains 60% of U.S. vehicle population
FL and OH totally paperless titles
PA statute mandates lenders to implement ELT
Mark Zalewski, AFSA

9. EMORTGAGES: STATE OF THE INDUSTRY
Harry Gardner, MBA

10. eMortgages are Here Lenders: GSE Support
1st Advantage Mortgage
AmTrust
Flagstar Bank
Boeing Employees Credit Union
GSE Support
Fannie Mae – eNote production w/multiple lenders
Freddie Mac – in production with Flagstar
MERS® eRegistry: Over 40,000 eNotes registered

11. Industry Progression
Document Imaging, OCR Electronic Doc Delivery eDisclosures eLien Releases eNote Signing, Delivery
Scanning / OCR
Faxing
eMortgages
eDocs
Paper
Delivery
eVault

12. Residential Mortgage Process Flow
SUPPLY
SUPPORTING DOCUMENTS
APPRAISAL
FLOOD MI
TITLE - PRELIMINARY
Order Services
APPLY
PREVIEW DOCUMENTS
SIGNING
CEREMONY
MAKE
MORTGAGE
PAYMENTS
Consumer
B2C
Disclosures
e-Sign
APPLICATION
PROCESSING
PRE-CLOSING
CLOSING
POST-
CLOSING
SERVICING
INVESTOR
DELIVERY
Lender
Closing Package
SIGNING ROOM
Preliminary Decision
Order Closing
Lien Release
B2B
MERS® eRegistry
SETTLEMENT AGENT
INVESTOR
UNDERWRITING
CREDIT
Vendor
Record Deed/Mortgage
COUNTY RECORDER 12

13. E-Lending: Key Components
Electronic Documents – Disclosures, eNote and eMortgage
Documents are displayed and the terms of the loan are preserved electronically
Documents are delivered to borrowers electronically
Documents can be queried, audited and completed with minimal human touch points
Industry standards exist
Electronic Signatures
Loan docs are signed by all lenders, borrowers and third parties electronically
Click-through
Signature Pad
Digital Certificate
Electronic Closings
Loan documents are presented to the borrower and signed electronically
Electronic Vault/Storage
Storage of electronic and / or electronically signed documents throughout the life-of-loan
Tamper Evident Seals
Automated Audit Checks / Trails
Electronic Registration and Delivery – MERS® eRegistry, eDelivery
Method of registering the “authoritative copy”
Reflects control and manages transactions that change ownership rights
Acts as the secure and open interface for the delivery of docs and data between entities
Electronic Recording
Electronic recordation of the security instrument and other applicable documents with the required public authority

14. Legal Standards: ESIGN and UETA
Mortgage Bankers Association
4/26/2017
Legal Standards: ESIGN and UETA
ESIGN - The federal law signed in 2000
UETA - A uniform standard state law adopted in 48 jurisdictions (remaining states have passed their own versions)
What both laws essentially say:
Decision to receive documents electronically and/or sign them electronically is an “opt-in” decision (all parties must agree to using this process)
A document (electronic record) or a signature can be in electronic form
Neither can be denied enforceability solely because they are in electronic form
What neither law says
Format of the electronic record or signature to be used
GROWING MISCONCEPTION:
States or jurisdictions can “decide” whether to accept ESIGN and thus whether eNotes are legally valid in their jurisdiction.
Mortgage Bankers Association 14

15. Resources

16. Back to the Issues
Verticals deploying own infrastructure, unique standards. How do the verticals interoperate? Can the technology requirements be standardized to support multiple vertical applications?
How do you measure the payback? Increased accessibility, transparency, process efficiencies, environmental?
Standardization efforts are vertically oriented, grouped in three areas
Operating Model – is the lifecycle complete (e.g., collections)
Business Model
Technology - can requirements be standardized to work across verticals?
Federal government deploys electronic signature/records across agencies and DOD, does this fit the private sector?
What is the connection between e-Sign and identity management technologies? Should authenticated identity information be used in e-sign applications?
Longevity
Record archive period likely to outlive technical applications
Bridging technology into the future
Consistency in acceptance of eRecords by states, municipalities, businesses
6. Contradictory federal (ESIGN) and state (UETA) statues may be hindering domestic deployment.

17. Where We Could Go From Here
Common requirements and interoperability
Should e-sign solutions be specialized for each vertical application?
E-sign Standards
Can they be made to transverse industry verticals
Financial, Health Care, Federal and State Government
E-sign Metrics, Measurements
How are the paybacks measured? Direct and indirect?
Process efficiency, transparency, accessibility, customer service
E-sign and Identity Management
Do business processes suggest a connection between these topics and technologies?

18. Thank You
Mark Zalewski Director, e-Standards American Financial Services Association Harry Gardner Vice President, Industry Technology Mortgage Bankers Association