20/20 VISION IN THE EVOLVING WORLD OF ERECORDING

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Annie: Hello, everyone, and welcome to today's webinar, "20/20 Vision in the Evolving World of eRecording." My name is Annie Triboletti, and I will be your moderator.

Joining us today are Kevin Kinderman and Mett Netta. Kevin is the Market Director for CSC's real estate division where he defines product positioning and marketing strategy to maximize revenue and strategic growth. Under Kevin's leadership, the CSC Electronic Recording Network has grown exponentially securing CSC's presence as the market leader.

Matt is a national consultant and manager based out of Wilmington, Delaware, for CSC. Matt is dedicated to CSC's Electronic Document Recording Program. He joined CSC in 2015 and currently works with leading title underwriters, real estate firms, and lending institutions throughout the country.

And with that, let's welcome Kevin and Matt.

Kevin: Thanks, Annie.

Matt: Well, hello, everyone. Thank you, Annie, again for bringing us in and welcome, everybody, to the presentation today. What you're seeing now is a few of the things that we plan to cover with you today, some of which include the growth that we've seen throughout the country with regards to counties being able to accept eRecording and electronically-transmitted documents.

And from there, we would like to transition more into the challenges that certain counties have faced, whether they have never eRecorded before or if they had already been eRecording and just the process workflow and how they needed to make transitions.

And from there, we'll discuss a little bit of the turnaround times with the increased volume of documents that we've seen and the statistics behind the recording times to actually have them placed on record.

And lastly, we'll go into a little bit of the things that we've seen regarding remote online notarization and electronic execution of documents of more widespread acceptance of those execution techniques and where we feel that the industry may go with regards to that.

But before we get into even all of that, I want to give you guys a little bit of background on CSC in and of itself. CSC is a global company, and from that, we service over 10,000 law firms just here in the U.S., over 180,000 corporate customers globally, 55% of the world's most recognizable brands. So when you think of yourself Coca-Cola, Apple, Google, in some way they take advantage of the services that CSC is able to provide them and even through to the financial markets with helping different lenders secure recording processes or searching mechanisms and things like that.

What you're seeing now is kind of our footprint. So we're spread, like I said, all over the globe from Australia, the Asian Pacific, over into Europe, and here in the U.S. where we are headquartered, and our flagship location being located in Wilmington, Delaware.

We are well versed in the needs of every company, be it large or small. So anybody from a Fortune 1000 down to a mom-and-pop shop in your local town would have something that they need that CSC is able to provide them to take it off their plate and make their processes and their workflow a little bit more manageable for themselves.

And here we have some of the services that CSC is able to provide. So, if you'd like us to act as your registered agent and handle your service of process, we're definitely able to do that.

Protecting your digital brand services, making sure that your internet domains remain secure and that you maintain that domain and that doesn't expire, your corporate filings, like your annual reports, your business license, maintaining that, and then kind of more focused on our industry in and of itself, being able to do your real estate recording, your searching of title chain, UCC searches and filings as well, are all things that CSC is able to provide you and really kind of be able to be a one-stop shop for anything that you may or may not need, not just to keep your company in good standing with your secretary of state's office, but just to make your workflow as easily manageable as possible.

Kevin: So we're going to move along and talk a bit about some of the recent growth that we've seen within our eRecording Network. There's been significant expansion both from new counties adopting electronic recording that hadn't in the past, and the expansion has really occurred within these last two months of March and April. We've been so impressed, and we'll talk in the next slide about how many counties have done that.

But in the midst of all these changes and challenges and the crisis that we've all sort of been experiencing, it's been so impressive that counties have not only adapted to that but they've also decided to implement an entirely new process altogether and begin accepting documents electronically. So very happy about that and glad to see so many counties embracing technology and growing the network of eRecording.

One of the other things that has changed over the last couple months is the document count, so specifically the number of documents filed electronically. And I suppose any of us could say, "Well, that was probably the safest way or most predictable way of getting documents submitted and recorded to the county considering the number of closings there were, or staffing scenarios where scheduling was difficult."

So we'll provide a little more info on those document increases and just the substantial growth we've seen in all sorts of new documents submitters implementing eRecording.

And then finally, the growth has also been with the expansion of additional document types. So although a county may have already implemented eRecording, there may have been limitations with what types of documents they were able to process electronically. And we've seen over a dozen counties expand their document types.

So we're able to process deeds or mortgages or UCCs or even a registered land documents in some of the Massachusetts registries. These are further expansions of the eRecording Network, so pleased to report on some of those items as well.

And here, you'll see that the specific growth that we've seen in March and even in April, there were 53 counties that implemented eRecording over the last two months, I guess in that March and April.

And you'll see the number one county here was Alameda County, California. So we say number one county, but this was basically the largest county remaining that had not implemented electronic recording. So they had a population of about 1.6 million people, and we're just super excited that that large county with many, many document filings had implemented eRecording.

We also see now the state of Kentucky implementing these processes and many counties going live there. Even Utah County, Utah, has expanded the number of vendors that they're accepting documents from electronically.

And finally, one of the things I'll comment about is the City of Providence in Rhode Island. eRecording is new in that State of Rhode Island, and the City of Providence is the largest recording jurisdiction by population in that state. So very happy that many of the local law firms have jumped on the implementation of eRecording so quickly. So excited about that.

I'm going to transition over to Matt here, and Matt is going to talk with us a bit about some of the challenges that we faced over the last couple of months and really the solutions that have been developed and utilized to face those challenges.

Matt: Thanks, Kevin. Really great info. I mean, I personally was kind of dumbfounded when I saw the rapid increase in adaptation that the counties were displaying with bringing on a new eRecording in jurisdictions that previously had not eRecorded at all. It was a really something wonderful to see.

But what we're taking a look at now is some of the things that we've noticed were initial hurdles or speed bumps in the road for many counties when we were all forced as a nation to begin to work remotely and to begin to acclimate to what we were now deeming the new normal.

Some of the things that the counties had never anticipated . . . I mean, obviously, I would never think that a county would have to physically close their doors, prevent people from having to come in and record their documents physically, but that did indeed happen.

And the great thing to see was that only maybe about a dozen or so counties that were experiencing what everyone was actually had to close down operations completely just because they did not either have the resources or the technology in place to be able to continue their workflow.

But in and above that, what we did here at CSC to help anyone really with access to internet is we developed our COVID-19 awareness page, and we congregated all of the information that we were getting from different counties that we have relationships with.

We were populating all of that information onto that page so that there'd be one centralized location for anybody that needed that information to go to, to see if there would be any type of delay in any of the recording processes with any of the counties that we connect with, and really any county around the U.S.

Beyond that, it was a great thing to see how the counties were so agile in adapting to the technological requirements that come along with eRecording and putting the necessary pieces in place for them to be able to continue their workflow.

Where most counties did implement such things as a Dropbox or still accepting physical mail but only maybe having the capability to check either one of those items two to maybe three times a week, eRecording was still an implementation that they made that would allow them to continue their workflow processes as normal, maintain their recording turnaround times, which we'll speak to a little bit in greater detail a little bit later on.

But in and above that, certain counties around the U.S. or certain states that require what's called an MOU, or memorandum of understanding, which is an added certificate, so to speak, for allowing documents submitters to submit documents electronically, a lot of counties implemented a fast track system to get submitters approved more quickly so that they themselves would not be impeded at all with getting their documents recorded.

And over and above that, we saw a real continuity between not just the industry themselves but the industry associations. So your local LTAs, your lenders, your title underwriters, and us even as the vendors were able to all come together to put out different webinars that everyone can take advantage of to increase their awareness of the availability of different strategies and tools that are available to them to make their workflows much easier.

Not just with the obstacles that we're facing with the pandemic but just in general as well once things do get back to our pre-COVID normal, these are still tools that will be in place that will allow them to make the most efficient use of their time as possible.

With that, I do want to bring it back to Kevin so that he can speak a little bit more to the actual statistics that we've seen regarding recording times and the increased document counts that we've seen across the nation.

Kevin: Thanks, Matt. I think you hit the nail on the head. There was a great deal of continuity, and while all of us may have felt like we were scrambling when this thing really hit us in the middle of March, many of us were trying to compile a list of county office closures, where we've been notified, where we hadn't, amongst other information. And it was stressful. There was a lot happening. But to see how everyone began to connect with one another, share information, it was impressive.

And the thing that we really noticed was for all of those submitting companies or counties that had already worked to adopt best practices from some of the industry associations . . . specifically the one that we list here and I'll mention is ALTA's Pillar 4, which addresses some best practices for recording specifically in dealing with even rejections. Even PRIA has put documentation together with 11 best practices for eRecording.

Companies, organizations, counties that adopted these processes before we went through this crisis, they were that much more to the advantage in being able to adapt to the situation. And frankly, they were able to optimize the processes because they knew what they were and they were able to sort of step up and provide even greater service, which we'll talk about here in a moment.

So with some of the average recording times that we've researched, we do want to preface some of this information. This is a group of documents that have been submitted by various companies, law firms, title companies, banks throughout the country. What we've done is we've measured the average recording time for electronic submissions in the months of January and February, and we've compared them to the documents that were electronically recorded in March and April.

And this just goes to prove the great work that the county recording offices did. The most impressive statistic: all counties in Florida that are eRecording, their average eRecording time in March and April increased. So the speed was better in those two months by 23%, so they're averaging less than a day in average eRecording time, whereas they were just over a day with their average time in January and February.

Illinois was another state that actually improved its average eRecording time over those two months compared to the first two months of the year. They're averaging 0.7 days for all eRecording submissions. So again, this is an across-the-board stat for all counties within a state, but very, very impressive numbers.

New York, perhaps the hardest hit state in dealing with the pandemic, very impressive that in January and February they were at 1.3 days for their average eRecording speed. And during March and April, they were at 1.33. So just a fraction of a delay in the speed of recording documents.

So, overall, just phenomenal results. Very grateful to the counties and for the recording offices in dealing with all the challenges that came with this situation and adapting to help all of us so much more. So there are a few stats about average recording times.

Well, it makes sense too. As we see the adoption and use of eRecording, that's sort of a necessary step in the evolution of where we're heading. We're heading toward a completely digital and electronic transaction where there's an electronic closing that occurs.

Now this final piece that we maybe hadn't had legislation in place for of remotely online notarizing a document, that piece is now getting satisfied where we're able to utilize technology for one of those last steps of the closing process. And I think we'll see an even greater number of digital mortgages and fully electronic closing transactions.

We wanted to provide a little bit of information just with what the latest is on specifically remote online notarization because there's been a blitz of states that have put executive orders in place to at least provide temporary authorization for remote online notarizations.

But also wanted to comment on something a few of us have likely heard about, which is RIN, which is a remote in-person notarization. And this is a bit different. It's an alternative notarization process where it authorizes a notary in certain states to witness a wet signature through the use of audio/video technology. And then if they've witnessed that wet signature through a video recording, they're then later able to use a wet ink signature and notary seal once they've received the physical documents. So that's a unique variation that is available in certain states, at least as a temporary solution, to complete and execute these documents.

But we know that to date . . . and again, these numbers do change a bit day to day because of the movement that's happening. There are 23 states with an executive order in place. Again, large majority of those are temporary orders that are able to be used during this emergency. Twenty-four are by statute, where 19 states have put permanent legislation in place, and then there are another 5 that have not addressed this at a state level yet.

But it's important to note that all of us, if we're considering the adoption of remote online notarization, that we're sure the other parties involved and related to these transactions, specifically the GSEs, so Fannie or Freddie, this is in accordance with some of the guidelines that they want their lenders to follow.

The title underwriter. So, if a policy is issued, we need to make sure that the underwriter is okay and comfortable and authorizes the use of remote online notarization for the transactions that they're insuring.

And then finally, the county. So there are these three parties. It's almost as if it's a three-legged stool. Each of the three needs to be considered and you'd need to be sure that they have each given sort of their blessing that RON transactions are authorized and permitted and acceptable for the transactions that you're conducting.

Last comment is just there's a congressional bill being reviewed, a federal act. It's called SECURE, and it stands for Securing and Enabling Commerce Using Remote Electronic Notarizations Act. It basically would authorize every notary in the U.S. to perform remote online notarizations. And that will certainly assist states, individual states, as they adopt their own legislation and put that in place. But if that is at a federal level, that will certainly continue and further the movement of remote online notary.