20/20 VISION IN THE EVOLVING WORLD OF ERECORDING: PART 2

Disclaimer: Please be advised that this recorded webinar has been edited from its original format, which may have included a product demo. To set up a live demo or to request more information, please complete the form to the right. Or if you are currently not on CSC Global, there is a link to the website in the description of this video. Thank you.

Annie: Hello, everyone, and welcome to today's webinar, part 2, 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, Jana Miyasaki, and Joe DeLuca.

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.

Jana is a Senior Product Manager for CSC's eRecording Business Real Estate division. She has been an operations leader for the past 16 years involved in all aspects of building a strong and results-oriented support team.

Joe is a National Account Manager of County Sales for CSC's eRecording Business Real Estate division in the Wilmington, Delaware headquarters office. In the last five years, Joe has worked with hundreds of county officials in 49 states to advance the adoption of eRecording. And with that, let's welcome Kevin, Jana, and Joe.

Kevin: Thank you, Anna. Well, first, item here, I would like provide a little more information about CSC, who we are. So CSC is headquartered in Wilmington, Delaware. And we've been in business since 1899. We're a business solutions provider for the largest organizations and businesses throughout the world. We provide solutions for really every phase of the business lifecycle, all the way from entity formation, other state compliance services, transactional work, and then a variety of financial services through UCC and real estate solutions. We also manage and secure our clients' valuable brand assets. And then in addition to that, we offer a single tax and risk management platform as well.

So we work with more than 10,000 law firms throughout the world. Some of the more prominent ones in the U.S. We serve over 180,000 corporate clients, over 3,000 financial markets clients, so lenders, credit unions, and investment companies. They utilize CSC and then of greatest note here at the bottom. We currently serve 90% of the Fortune 500 companies in some capacity.

A bit more about CSC, and our global presence. As I mentioned, our headquarters is in Wilmington, Delaware. And we have many offices throughout the U.S. We have offices throughout Europe, Asia, and Australia as well. And then here's a list, just a reference of some of the additional services that CSC provides, our Registered Agent services, UCC Search and Filing, Real Estate Recording and Searching, Matter and Deal Management Services. And then along the bottom row, Corporate Filings and Documents to be recorded and filed with state governing bodies. Entity Management and Compliance Services. We also provide Global Financial Market Services, and as mentioned earlier, Digital Brand Services.

So with that, we will go through the agenda and we've gone through introductions. We're first going to have Joe DeLuca talk with us about the new way of doing business for these county recording offices that we've worked with over, you know, the past two decades. But recently with the events of COVID-19 and that pandemic, what county recording jurisdictions have had to do to modify business and allow us to carry on and continue with our businesses each day.

We're going to go through legislation and pressure to go digital. Many of us on the call have heard all sorts of information over the past few years about e-closing portals, digital mortgage, electronic or remote notary services. We'll go into a bit of that and provide some insight. We'll also talk about the various types of electronic notarization and even detail what makes them unique. We'll touch on the SECURE Notarizations Act at a federal level, and then touch on some unique state variations how all states really have been different with how they've responded to this.

Joe: Great, thank you, Kevin. So what I'm going to do is just review my viewpoint from a county perspective. And I'll start with an overview of just recording methods. So go back in time for a few hundred years here in the United States. If you want to record a document, you have to walk in the original documents to a recording jurist and complete the process that way. And that's just the way it was. And, you know, until the introduction of allowing mail or other like services, like U.S. Mail or FedEx or UPS, or even having couriers come to the office or title companies and law firm sending employees into county offices. That was the next addition. So rather than walking it in, you had the option of mail in some fashion to the county.

And it wasn't until 1999, the introduction of eRecording hit the marketplace here in the United States. And that was back in [Lancaster, Pennsylvania 00:05:59], where CSC played a role of implementing eRecording. First document was recorded in the first county. And that's where all of this started. So what this introduced was the opportunity to send an image of an original to a county office or recording jurisdictions so that they could record that document. And that was accepted.

But it's been a long process because along the way, it required county and state approval and legislation, adoption of this new technology. It started off slow, but has grown now to include over 2,000 recording jurisdictions in the United States. So that's what makes up the three legs of the stool of recording documents, walking in a document, sending it through some mail type of service or courier service, or electronically recording it through a recording service. And then March comes, and COVID hits, and it messes up the whole process.

Beginning you had some county offices, recording jurisdictions close all together, indefinitely. Certainly most offices, if not all of them that stayed open, eliminating walk-in traffic. It took out the first leg of recording. You could not walk in a document to have that document recorded, nor could any of the employees, you know, from title companies and law firms walk in and get the [inaudible 00:07:32] like they normally had.

In some cases, even the mail stopped or mail was being held in the early day COVID with the fear of contact spreading of the pandemic. Nobody wanted to touch the mail. And mail would either sit untouched for days, for weeks, in some cases, or they would have it go into some type of drop box. And it would have to stay in a drop box there for 24 hours or 48 hours thinking that that should take care of everything.

And so in essence, what is happening is it stopped almost everything or it certainly stopped the first methods of recording, the walk in and the mail process for recording documents. In addition to that taking place, counties were using skeleton staff. So if they were staying open, they wouldn't have everybody come into the office. They would move people to remote locations or work from home, if they were able to pull that off. They were alternating staffs coming in and out. So you might have somebody proficient in recording that's able to come to the office for part of the week, but not the rest of the week.

And so, hopefully, what you're all thinking now, is that okay, and what we'd like to think is, so eRecording saved today with COVID. Correct? Well, in many cases, that was the case. So you have 2,000 recording jurisdictions who have eRecording on already implemented. They are able to use that as long as they have access to the equipment to do that, that's either in the office or in mobile units or working from home or remote locations.

But there's still issues with eRecording. eRecording has not been fully adopted. I did say over 2,000 recording jurisdictions using the eRecording right now. But the total number of jurisdictions, 3,600. So it leaves quite a few, almost a couple thousand jurisdictions that don't eRecord. The good news is most populated areas in United States have adopted the eRecording. So the eRecording service does cover 85% of the population. So if you're in a populated area, county state, it's most likely that eRecording is going to be available to you in some if not most jurisdictions.

But the other thing that was holding up this process, there are thousands of submitters not eRecording in the United States. And so there was a mad rush to get these people set up for eRecording. And I know that in the last three, four months, that thousands of new submitters signed up by CSC to begin eRecording.

Another issue is doc type. Not every county necessarily accepts all doc types through eRecording. And the reason for that is there may be a routing issue, a particular document may have multiple steps in an office to be fully recorded. And that is a challenge.

And then lastly, you know, who's going to process all these e-files? I already mentioned that there's issues with staffing and issues with equipment. So just because they could eRecord didn't necessarily mean that they were able to get everything complete. But I think overall, working with counties and knowing counties, as I do, that the counties really stepped up big time. These are people who they didn't want to go home. They didn't want to not work. They did not want the process to stop. They're probably the most committed people in any industry that I've ever met.

They know how important their job is, how important it is to record land record, real estate documentation, and they want to get that work done. And so they would stay at work long, take work home, they would get set up at home with laptops, if they could be. They would be able to eRecord. They'd set up offices. Some even have mobile units that they can use to go get their services done in different parts of their county. And they were really a big help to CSC because they wanted as many eRecording as possible now because that was their only method or it was a sure method for them.

And so they would provide us with [inaudible 00:11:49] who was still trying to send in paper documents and could please contact them and tell them about the eRecording to get them set up as quickly as possible. And that's what we did. And so, like I said, we have added thousands of new submitters over the last few months. We've had 100 new counties already. There's another hundred counties that are in the works.

Almost every county would love to have eRecording right now. But it's a catch 22. They're in a really difficult situation of getting their jobs done. And so, as much as they would all like to add eRecording, there are still limitations to what they can do. There are steps that be taken. IT has to has to [be involved 00:12:31], land record management companies and their software has to be involved. But many more make progress towards adding this great technology.

And so that's my brief overview of what's been taking place in the last few months. I know Kevin has worked on some of the detail about the number of documents that have been recorded, how quickly they're recorded, and he can speak right now to what that's actually look like. [inaudible 00:13:01].

Kevin: Yeah, Joe, you mentioned a lot of things the county did and counties did or the recording offices did. And that's good insight, Joe. But when we did this little analysis and looked at the average recording times, so of all documents submitted, you know, through CSC's application to the recording jurisdictions, for those submitted electronically, we measured the average recording time in the months of January and February. And we compared that to the months of March and April, just to gauge how quickly the county had been recording and returning documents versus, you know, the earlier months.

And really, to our surprise and, again, this is a wide net that was cast. This was throughout the entire country. And while I'm sure there's anecdotes in certain counties or states that may have been challenged more than others, this is a safe number because it really captures the entire country. And there was very little to any decrease in average recording times over those two months. And the states that stood out the most, Florida, again, we're capturing all Florida counties that do already eRecord. They had a 23% increase in speeds. So they were getting documents recorded faster in those most challenging months than they had been in the past, all this with increased volumes as well.

One other state that just did surprisingly well was Illinois. It had an 18% increase over the first two months of the year. And even Minnesota, a substantial increase in average recording time of 33%. Even states that were hit very hard, New York, this is one state that amazes me. Their average recording time, it decreased so it was just a pinch slower but was only 3% slower. And that's amazing considering the things that they encountered.

So, again, overall, almost every state was just fantastic. I think we want to give them our praise, and thank them because, as I mentioned before, and as Joe said, they've been very committed to the business. They understand our business. They want us to be able to continue business. And they know that recording documents is a part of that. It's sort of at the tail end of many of the transactions that we work on. So we're grateful for them, and just glad that there have been such good results from them being able to move and pivot so quickly in such a tough time.

So we're going to transition to Jana now. Jana, if you can share some information just about legislation that's been put in place, really over the last two decades, about how that's almost created a framework for us now to be able to do more.

Jana: Sure. Thanks, Kevin. So Joe mentioned the year 1999, and that's an important year because that's the year that the digital framework was really started. It seems crazy that it's been that long for us to sort of progress to where we are today. But that's when the foundation was laid. And that's when eSign and UETA or enacted. eSign is the federal act and UETA is a state act. And the eSign Act is modeled on UETA and sets out the same key elements, which when you drill down are a contract may not be denied legal effect or enforceability solely because of the electronic form. And if a law requires a record to be in writing, an electronic record satisfies the law. And if a law requires a signature, an electronic signature satisfies the law.

And then URPERA was passed, which enacted the ability for clerks and recorders to eRecord. And RULONA, which allows notaries to electronically perform notarial acts. So all of that foundation started back in 1999. And again, when I think about that, it just seems crazy that it's taken that long for us to get to sort of where we are today in this digital world.

And then technology moves further on and MISMO finalized standards allowing for remote online notarization, which we'll talk more about in a few minutes. And then the TRID requirements that there must be an electronic audit trail for lenders and other parties. So all of that pushed us forward into the digital world that we're moving into now that Kevin's going to go over a little bit more.

Kevin: Yes, so there's been this growing pressure, I guess, now more than ever to adopt technology, to go digital. And it hasn't been just pressure on the recording jurisdictions. It's throughout our industries. We're referencing some information here that we've been able to pull from some other surveys that have been conducted. But there's pressure on homebuyers. We know this. But one interesting thing here is that 83% of homebuyers that were surveyed as part of this survey, they've been open to that option, where if they were given the ability to electronically sign or notarize documents, they're going to take you up on that option. They're willing to adopt the technology.

Even some realtors, where it says here, the 46% of all real estate firms that they've cited, this has probably been their greatest challenge over the next few years is to adopt the technology, implement processes and make that transition. Because we know how significant it is. It truly is a business operational change.

Financial institutions, so 44% of lenders. This is interesting. They said they're investing more on their external facing applications, so their frontend systems. I think it was 44%, right, where 18% only reported investing solutions on their backend operations. So they too acknowledge that they need to get out in front of their clients, they need to provide these digital solutions and technology.

And then here on the settlement side, 32% said that their best opportunity over the next 12 months was if they are to use new technology. So for them to strengthen and grow their business, they recognized and acknowledged that we need to do this through the use of technology.

And then some additional information, just about the impact of these digital tools on the end users. So not the companies or the businesses having to adopt those tools. But here it says, 76% of those respond to this "Voice of the Title Agent" report said that they're already conducting eClosings, will conduct them this year or by the end of next year. And that's impressive because we talk about a lot of this technology, but they're actually putting it in place where they plan to, if not, they already have utilized eClosing processes.

Sixty percent of people in another survey conducted said they can't live without the eRecording capabilities. Even 43% of them said that auto-filling some of their forms has been adopted. So it's provided a more efficient and accurate process.

Twenty-seven percent of lenders have used AI. So we've heard tons and tons over the last couple of years about artificial intelligence and how that can automate or predict some of the processes to make, like, our workflow a little easier, where they've said that they've considered using those tools or, excuse me, they have used those tools. And then 58% of those lenders say that they will adopt some type of artificial intelligence solution within the next two years.

And then finally here, 21% of these title agency surveyed, were offering RON solutions. So RON is Remote Online Notarization and we'll talk about that a little more. And then obviously, the 16% here saying if needed they can provide an emergency video notarization process.

So it's impressive. It's impressive that we're not just talking about the need and willingness to do it. But here we've got some, you know, firm statistics on adoption and actual use and how it's benefiting the business that we're all involved with.

Jana: Right. So what is RON and RIN and all these other acronyms that are getting tossed around lately? And if you break it down, RON, Remote Online Notarization really just allows the consumer and the notary to be in two different locations. That's really what it breaks down to. And the fact that we're in the middle of this pandemic has just accelerated the need for this type of technology to be out there in the world.

This slide that just came up on your screen is provided to us from the American Land Title Association, ALTA. And they're a huge partner with us. They're a great source of information. And I think they've put together an excellent slide to walk through the different notarization types. And if you start at the top and you look at Remote Online Notary or RON, you can think of it like this. Let's say due to COVID, I need to refinance or do a modification. And so these documents are sent to me electronically, but in today's world, I'm not comfortable either leaving my house or going somewhere where there's a notary. So my agent might have connected me up with one of these companies that does remote online notarization.

And the process basically works like this. You connect in, you're going to put in some identifying information, and then you're going to get to what they call the knowledge base authentication portion of it. And that's where you're asked questions and you're pre-qualified to get your notarization done. And the questions are stuff like we've all answered before. Of these five streets, which one have you never lived on? Or of these five cars, which one have you never owned? And it's from like, you know, one of those national LexisNexis database type places that these questions are coming out of.

So once you authenticate yourself and you are allowed to miss a few questions, and I think you can do it two or three times, it depends on the actual company that is providing RON for this person. Once you've authenticated yourself enough that you're passed that part of the process, then the notary comes on the screen with you. And the notary will do things like say, "Hold your government issued ID up to your face so I can see you and your issued ID." Some companies may ask you to show your camera around the room so they can make sure that you're not signing this under duress or anything like that.

And once all of that has been, you know, worked out and the notary has seen that everything is passed what it's supposed to, the actual notarization process takes place. And during your sign-in process, you created a signature. So you use that signature that you created then, you apply your signature, the notary applies their notary and stamp. The acknowledgement will list that this was done, you know, via remote audio visual. This session is captured. The RON company has to save that notary journal, the electronic one. And now you've signed and notarized a document without ever leaving your house. So that's really what RON boils down to.

Kevin: Yes, Jana, that that was . . . I mean, this has been information that many of us have been struggling. I don't know if it's comprehend but there's just been so many acronyms and so many details to these remote or electronic notarization processes. That summary is helpful because many of us may have thought initially that an electronic or remote notarization could occur without the use of technology. But that, in essence is what a Remote Online Notarization is. It's a technological notarization through technology and software.

And the paper remote notarization process is similar. It's not through an electronic document. So this is where a physical, you know, paper document is hand delivered either by courier or just mail but the same notarization or electronic processes are utilized. You'll see in the second row of the chart, the columns toward the right, PRON or paper remote notarization still requires the use of a multifactor authentication process. So there's some type of credential analysis that will have to happen or a knowledge base authentication that occurs to just verify you are who you are.

There's also a recorded audio-video log of the interaction with the notary. So there's a document, the log of what things occur. And I guess that's the biggest difference with paper remote notary and standard remote notary, is paper is obviously occurring through an actual paper document. That needs to occur, that delivery of the actual paper document. That's one of the differences. So Jana, tell us about some of these others. The next one, Remote Ink Notarization.

Jana: Sure. So an example for this is something that I've dealt with one of the large banks that we work for or work with. So they can prep their documents in our system, but these assignments for whatever reason, their legal counsel said they shouldn't be electronically signed, but they're allowed to be electronically recorded. So, pre-COVID, they had a signing room at the bank, and the signers, and the notaries work together. They know each other but they're in a signing room and they have the whole pens down process that probably a lot of people have heard of on the phone.

And so now, you know, fast forward to COVID days and now everybody's working from home. So the way they've handled their and RIN, Remote Ink Notarization is the documents are prepped by the data entry person and prepared in QC'ed. They are sent to print and they're doing this from home. They are sent to print in the office. The signer then goes into the office and takes the documents off the printer and starts a Skype session with the notary, who is somebody that they know and have worked with for years. And they start the signing process. So they sign all the documents. When they're done, they end the Skype session, they save it, they then clean the office, leave the office, and then the notary actually comes in and does the notarization. So that's sort of an example of what they mean by with RIN. Kevin, you want to take the next one?

Kevin: Yeah, sure. I feel like I'm getting the easy ones where you're providing the whole basis for understanding. But this next one is just the Traditional Wet Ink Notarizations. So this is what's intact today, what we're all familiar with. Physical paper document is used. No software in the sense that there's no multifactor authentication or KBA. And then obviously, there's no recording of the audio and video sort of interaction. So this is what is most common today. But there's one final one. And, Jana, you did all the tough explaining here. So I'll let you have that one too.

Jana: Thanks, Kevin.

Kevin: But it's the In-Person Electronic Notarization.

Jana: Thanks. So IPEN. So to me it, and I'm going to date myself, this reminds me of Etch A Sketch when I was a kid or when the UPS guy shows up at your door and he hands you a pen and the screen, and you're now scribbling something that doesn't look anything like your signature onto a screen. That's what IPEN is. So the document is an electronic document. You're in the notary's office or you're at the signing table and they sort of pass around this screen that you sign with a pen. Sometimes you can even use your finger on those. But it's that screen with a pen on it. That's what the IPEN solution actually is.

So that's sort of, I think, a good overview. And I think that this ALTA screen or ALTA slide is a great slide to keep handy because it really does walk you through the different types of notarization that are going on in the world today.

And then moving forward, the SECURE Notarization Act is something that is being heavily pressed to be passed, which basically would permit RON, you know, with minimum standards across the United States. So it's not like, "Okay, what state am I in? is RON allowed? Can I do it? Can't I do it? What are the ramifications? What pieces of it do I have to do? And then is there interstate recognition for it?"

So that's what the SECURE Notarization Act is trying to cover is to get it to the point where, you know, we're living in this COVID world, all of us are unsure how long it's going to be for. We need some standardization out there to say, "You know, RON is good and okay across the United States and accepted across the United States." So that's SECURE Act is.

And then every state is unique. We all know this. we probably all live in different states. But, you know, until we have a national law on this, we have to be sure what counties and what states will accept what so you avoid rejection. So that's really the main thing is to make sure that you're aware of what's allowed, where you're trying to send your documents to be recorded.

And I think on the next slide, Joe will walk you through some resources. But I remind folks that there's some great resources out there on ALTA and PRIA websites that actually tell you in this state, RON or RIN or whatever is allowed for notarization. So those are good resources to keep with you. So Joe, you want to take us forward with some resources?

Joe: Sure. Thank you, Jana. That's a lot of really good information. And hopefully, people on the phone realize that. But they're probably asking themselves, "Well, okay, this is great overall information, how does it apply to specifically in my state, my county jurisdiction? And so what's best at this point would be check out some of these sources. So there is one that's here from CSC. You can connect this with. And you'll be receiving this information after the fact if you don't already have it. You'll be able to use these and then what a great organization and a great resource. I mean, not only for us, but for you all as well.

And so there's three dates here with different information that I think will interest you that you're able to access from the URLs. And then last, PRIA, Property Records Industry Association, another strong organization in our industry that we're heavily involved with, and they too have a couple of good sites to go to find additional information. So hopefully you can utilize those. And if there's still questions, we are available to help at all times.

And so that brings me really to the last slide here. Why CSC for eRecording services? I hope we've [answered 00:33:13] at least some of that and built your trust in why you would use CSC's eRecording services. I start down here on the on the right-hand side in this gray block. And that is, we've mentioned it but C was the company who developed and launched the eRecording program back in 1999 with the very first eRecorded document. And so we've been in this for a long time. And it's been a long and arduous task, but we have built what we think is the best platform in the industry.

I will say this about our company and they never stop trying to make this program's process better. So we have a key staff and a development staff who actually have . . . They work on two [inaudible 00:34:01]. And so they have a list of that people have requested that we accomplish or improve or we want to upgrade or update. And so that is happening all the time. We do not settle for what we have right now, continuing to want to make it better.

I believe we've rebuilt the whole program from scratch, two, three, maybe even four times to make sure that this was new and fresh, and not just something that gets bolted on to an old program every time we need to make an improvement. Another word of this, we believe we built the best bridge between submitter partners that we have and the eRecording or the recording jurisdictions that we work with. We want to make this easier, better, faster, more efficient, safer than any other form of recording a document.

And lastly, I would say that, you know, CSC is very serious about, we get involved with, how we support companies, organizations. We are the world's leading provider of business, legal, tax, digital brand services to companies around the globe. Kevin mentioned to you that we, we work with [90% 00:35:15] of the Fortune 500 companies. We work with the largest banks in the United States and around the world, largest title companies, government agencies. We have to get things right all the time. We have to be perfect all the time. And so that helps do that on a high level, but also say this, it's not just the large companies that we work with that make us successful. We work with some of the smallest companies in the United States too, even if it's just one person. It could be an attorney, a small title company that has a handful of employees. They're getting the same service that we're giving to average, most recognized companies in the world.