TOOLS TO TACKLE 2022 REAL ESTATE MARKET UNKNOWNS

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Caitlin: Hello, everyone, and welcome to today's webinar, "Tools to Tackle 2022 Real Estate Market Unknowns." My name is Caitlin Alaburda, and I will be your moderator.

Joining us today is Kevin Kinderman and Pete Rassias. 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. Pete is the Director for CSC's Real Estate Division based out of Wilmington, Delaware. His primary focus is business development and strategic growth of the electronic document recording program. He brings his vast experience in sales and leadership to his team, and under his guidance the business has experienced record-setting growth.

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

Pete: Thanks so much, Caitlin, and welcome, everyone, and thank you for taking the time to join our webinar today. As Caitlin mentioned, my name is Pete Rassias. I'm one of the sales directors and managers here with CSC. I've been with CSC for almost 15 years and was with Bank of America's Mortgage Lending Department for five years prior.

Enough about me. A little bit about CSC here. We are the trusted provider of choice for 90% of the Fortune 500 companies. We are headquartered out of Wilmington, Delaware, although we maintain registered agent offices in all 50 states, and we have offices worldwide. And we are truly a global company. We work with over 10 000 law firms and are ranked by the "New York Law Journal" as a top provider for legal services. We support over 180,000 entities, all the way up to the Fortune 5, down to mid-market and startups, and all the way down to brand-new businesses, where we are incorporating hundreds of new businesses every single day. Our digital brand team supports 7 of the Top 10 Global Brands, and we work with over 3,000 financial institutions. So big or small, wherever you're located, we're here to help you with your business.

Okay. The second item I'd like to show you is our robust menu of service offerings. Some of you on the call today are already using us for one or two of these services and are taking advantage of CSC to handle many of your compliance filings. What you're seeing here is a comprehensive list of the services that CSC offers, with real estate eRecording and searching being just one portion.

We offer registered agent services in all 50 states. We can file corporations, LLCs, and amendments and file your annual reports. We offer UCC services to help our commercial clients in the same way that we help our residential clients. Real estate, we're going to get to that later on. But we have plenty of real estate services that we offer. And Matter Management provides a document management solution primarily used for litigation, but can also be customized for contracts and other important documents as well. Bottom line is we do so much more than just real estate. We truly are an extension of your legal filing department.

And here's our agenda for today in terms of a quick overview of today's presentation and what we're going to be discussing in our webinar. The 2021 mortgage lending and housing market review. Look, lots of things happened last year, and Kevin and I are going to have some interesting callouts and some stats that happened in the industry and really some examples related to real estate. So look, 2020 was a crazy year. 2021 was also a crazy year as well. So we're going to talk about all the good things from last year and the good things that we're anticipating for this year.

How providers adapted to the evolving demands. It kind of goes hand in hand with the role of technology, right? A lot of evolving demands, you know, forced a lot of consumers and a lot of our partners to adapt new technology. So all these demands, all these adaptations forced us into using more technology. So this is going to be pretty heavy talking about how all these things sort of work hand in hand, what worked and what didn't work.

We have some projections for the year ahead. This is the second time that Kevin and I have done this webinar. What's neat is that when we looked at sort of some of our predictions, and I'm using air quotes here, predictions and projections from last year, there were a lot of things that, you know, from the data that we look at and the way we look at our business and the way we look at data from other sources, there was a lot of things we got right. And so we're very interested in seeing how this plays out next year as far as our projections for this year and how they're going to play out when we do this again in 2023. But we are going to give our projections again this year, just like we did last year.

And then, of course, we're going to talk a lot about how CSC can help. There's a lot of information that we'll be giving to you, but we're also a service provider and so we're going to talk about how some of the information that we're providing to you ties into some of the services that we also offer, so we can kind of piece all this together and get more of you that aren't partnering with us to consider CSC as your real estate partner.

And with that, I'm going to turn it over to Kevin.

Kevin: All right. Well, thanks, Pete. I'm eager to get back into some of these statistics here and a look back at least at, you know, 2021's metrics from the mortgage lending perspective and some of the home sales numbers that we saw.

In '21, mortgage lenders, they issued a record-breaking $1.61 trillion in purchase loan originations. We know that this was primarily driven by the low rates, and we saw that they sort of hovered around 3% for the large majority of the year. But just an exceptional year. If we weren't busy enough sort of adjusting to some of the changes we've all made through COVID, we certainly stayed busy with the high number of transactions and volume that we saw.

An important callout here was just the wildly high number of refinances. This was 62% of all origination dollars was from refinances. So refi was $2.63 trillion, which was the third highest all time. So again, many, many homeowners and borrowers took advantage of the low rates and have secured that for themselves for the next however many years.

But two other interesting stats just as we look back. The median existing-home sale price last year was $346,000, which was up 17% from the year previous. This is from the National Association of Realtors. But really an impressive stat that shows how much property values are increasing. And then the median new-home sale price had reached 408 grand again last year. This was just recently reported by the St. Louis Fed. And again, just impressive statistics to see that these home prices just continuing to rise. And we do sort of expect that there will be continued increases although not at the same rate. But there will be increases in sale prices in this coming year.

Just saw some updates even this morning about delinquencies and just how they've really fallen below these pre-pandemic levels. Today 3.6% of mortgages are in delinquency, and we've seen that this has been a strong mortgage lending indicator that it typically follows sort of nation's or the economy's overall growth. So that's kind of a natural association that we'll see there.

But ultimately, borrowers have really leaned heavy into their equity rich homes, right? This has been one of the reasons why delinquencies has been able to stay so low. We did see some increases in the beginning of the year, so just last month, in January. But essentially these increased property values have really been a saving grace to some and allowing us to keep those numbers low.

We also saw that, oh, I think it was the expiration, right, of some of these policies and forbearance programs have also sort of increased these delinquency percentages just over the last month. But, again, just a very low percentage overall and again a healthy indicator for the industry as a whole.

All states most impressively had a year-over-year decline in delinquency rate. Some of the largest declines from '20 to '21 were in Nevada, New Jersey, Hawaii, Florida, and New York. So interesting indicators to look back at. But overall just a very busy year and a healthy year for the mortgage lending industry.

All right. So moving along here to the next slide is really more interesting data and information for us to consider as we look back at overall market conditions. We really hit head on this whole supply and demand chasm. It's essentially been part of the reason we've seen property values and home prices go up so much. 

But just at the end of the year, there's been fewer existing homes for sale than ever. At the end of the year, it said inventory it fell to an all-time low of 910,000 existing homes for sale. And you'll look at the little chart here on the right, but just see the significant difference, you know, between that yellow line there at the bottom, which reflects '21's existing active listings versus, you know, really even just the last three, four, or five years how big the change that there's been.

Two other interesting stats here is that home sales in the price range of $100,000 to $250,000 saw a decline of 23% in December versus that prior December, and that overall home prices in the range of $750,000 to $1 million, that those homes priced have increased 32% versus that prior year. So clearly we see some very, very strong demand indicators in certain home price ranges, and that's clearly a strong factor that we need more inventory, right?

So one of the speculations is that move-up buyers are essentially going to be purchasing new homes, and this will ideally free up some inventory. We do expect there to be some growth in home sales in '22. MBA has forecasted that this will be another record year in purchase originations. And we have seen even that home builders, they're really making strides. Their pipelines are full, right? The cost of lumber has come down. Overall, materials is a bit more manageable than it was earlier in the year. But ultimately, you know, forecasts that this is really going to take years to correct, just to get through that pipeline and that strong demand that there is for new homes.

A quote here from Goldman Sachs essentially predicted that of all the shortages afflicting the U.S. economy, that the housing shortage will likely last the longest. So just some factors to take into account here. But probably the primary driver to such an increased demand here is that there's very, very low supply.

Okay. So touched on a few of these just in the previous slide, but ultimately, you know, what does all this mean heading into the new year. Another indicator just reported this morning was inflation percentage, and that this has really been an element that has sort of provoked the most discussion around rate increases, you know, that are needed.

But there's been a variety of reports from various economists that, essentially, they're predicting average rates for the 30-year mortgage to be somewhere between 3.8% and 4.3% by the end of next year. We do expect a few rate increases throughout the year.

There's another metric here provided that the share of refinances in total mortgage originations, that there's going to be a significant drop. Now this is, you know, by 2023 it dropped 27%. But MBA has also forecasted a significant decrease in refi percentage or refi originations relative to what we saw over the last year or even two years in refinances.

And then, you know, with the exception of these rate increases, we do still expect to see salary increases and that there will be ongoing flexible work conditions, and that those two things, they'll really continue to keep purchase demand very high. Interesting indicator there.

And then we're seeing really some variations in what some of these economic experts, you know, are predicting about home prices. They're suggesting that with forecasts, right, from just this past quarter, if we were to compare Q4 to Q4 of '22, some say that they expect those prices to have an increase of 16%. Zillow here is 13%, Freddie Mac 7%. And then MBA is much more conservative. They expect home prices to really ease quite a bit by Q4 of this coming year.

We have seen a significant jump in rents, right? They're also expected to increase about 7%. Interesting factor that really might . . . it might cause renters to consider, you know, buying a home, right, if these rental prices continue to go up.

And then there's even been some news about deregulation of land use and some new construction. Essentially it'll provide more opportunities for investors to do more with their capital and potentially have an influence on prices.

So there's a quick wrap-up of what we expect for 2022. But ultimately a strong mortgage origination market, strong purchase market. Home prices will continue to rise, and it will certainly be interesting to see how the rest of the year plays out.

Pete: Okay. The role of technology. You know, when we think of technology, very high level, there's two pieces of this thing, right? 

Kevin just talked about how the pandemic in the market and how it created this demand with rates and how the new adoption of working from home and virtual meetings and new technology affected the market in that there were a lot of buyers out there that were considering homes that they would never consider, such as second homes or homes with second offices and things like that, that were probably never on a consumer's radar, that were now taken into consideration and impacted buying considerations that were never in the picture previously before the pandemic, right? Things like location, space for workspaces, stuff like that, these things just weren't on the table in previous years, and that's one way technology impacted the market.

And then there's the second piece of technology, right? This is the biggest piece I'm going to talk about over the next couple slides. Look, teams had to accept all these and adapt to all these new processes because, well, you know, there was a lot of lockdowns going on a couple years ago, and so we had to create all these efficiencies in order to stay in business. So you think about how, you know, technology and a company like Netflix, how it changed the movie industry and how Uber was a disrupter to the transportation industry.

How is mortgage technology affecting the real estate business? And this business is typically a traditional business, where processes were really set in stone. Many believe that, you know, the real estate business was going to be immune to adapting all these rapid adoptions, but that really didn't happen here. What we've seen is all the pieces in the real estate transaction, from origination to closing to servicing, technologies were adapted across the board, similarly to how our own businesses accepted virtual meetings and things like that, you know, day in and day out through the pandemic.

So bottom line is a lot of these technologies are here to stay. And we're going to get into that in the next couple slides.

Okay. The demand and adoption of digital tools soar. So what happened here? So in 2020, there was this long line of business of consumers that were awaiting these real estate services, and everybody else was really trying to maximize every advantage they could take to capture all the business. So market conditions, like lower rates, created this demand, and you needed more staffing. And if staffing wasn't available, you had to adopt new technologies in order to make processes faster, more efficient so you could get more business, right? You had to adapt to keep up. And if you weren't adapting, you were either losing business or you were potentially going out of business. And again, that was in 2020.

What happened in 2021 was really interesting. Our operational costs went up. Really the cost for everything went up. So now you still need your technology to keep up and closing more business, but you also needed that technology to offset some of the rising costs, such as staffing and other expenses within your business, because you weren't going to get more staff because there's a labor shortage, to still be more cost effective. So this kind of phenomenon and situation, it's really been proven.

In 2021, Infosys did a survey. Ninety-two percent of respondents, you know, they said they doubled the pace of digital transformation over the last 12 months. So not only have they all adopted, you know, new digital technology, but 85% of those intend to keep it and upgrade it throughout the year. This information is great because it just means that real estate technology wasn't just a one-hit wonder because of the pandemic. It's here to stay because they've realized the efficiencies and the cost savings of it.

The second, kind of to second this phenomenon here is the "Title Report." Great publication here. And they also say, you know, the title industry also saw the introduction of digital solutions, you know, predominantly in the areas of data access, process automation, workflow streamlining, and workload reduction. So as the pandemic becomes endemic, it's looking like the technology needed to maneuver the pandemic and the demand is here to stay.

Okay. The promise of technology, right, what does it bring you? We have a list here, and we're going to start right at the top. The two big drivers here for adopting technology. Similarly we're going to talk about on the next slide, later on, on some of the some of the two big deterrents, but the two big drivers are cost and time. Those are the two biggest reasons why companies are adopting new technology. And as long as you're using your technology to see your operational costs go down, this can be a reduction and not necessarily a reduction of those costs, but really a replacement of some of those operational costs. Okay.

And then you're going to have efficiencies that are going to lead to faster task completion times. And again, time also goes back to money, and time is money. So again, these two things really go hand in hand.

The other piece of this, that kind of envelops all of it, is we've had a positive borrower experience with the loan closing process. So, you know, when technology is being used on the backend and the user experience on the front end is either unaffected or they benefit from some of these faster turnaround times, thus saving some money, and this seamless transition and experience for all parties really makes it easier to adopt. I mean, think about it. If the user experience wasn't positive, no one would be using this technology. It would be a burden. It would be more expensive. It would take longer. So they wouldn't continue to use it. They would certainly go back to the old way if it was more efficient and cheaper.

But because we're adopting the technology, most technologies, that are successful, we don't we don't go back. We always go forward. So this is a great example where, because of that borrower experience and they're willing to pay for it, not question whatever costs are involved in participating in a transaction that is a little bit more digital, is going to stay.

We have reliable security and storage. This is great. So many instances, you know, technology is going to create this repository. I mean, gosh, how many times do we defer back to an email that somebody sent you a week or a month ago? You know, it's how many of your Outlooks today are acting almost like a secretarial repository for notes and things that you may have forgotten about. And think of all the documents and tedious pieces of information you have in a real estate transaction. The documents that you may need later on, you know, unlike webmail now like, you know, most technology is going to be very secure and they're going to meet the auditing standards that comply to ensure that these documents are stored in a safe and secure place. So again, this repository tends to be very valuable in the event of one of those daily work emergencies that you have we need to go ahead and find a document for something that was processed a week ago, a month ago, a year ago.

Real-time sharing, accessing and feasibility. Look, it's great to have all the information that you need at your fingertips, you know, anytime anyplace. Particularly with a lot of folks still, you know, hybrid working from home, you can log in to your systems and find the data that you need.

And lastly, many of the technologies that we see today have the foundation to be pretty improved upon and enhanced in the future.

All right. So what does the demand look like, you know, in the future, right? Or what are some things in real estate technology that may not be picking up as fast as others, right? Look, not all transactions are created equal. Buying a house is not like driving through Starbucks and getting a cup of coffee. It's the biggest transaction that most are going to make within a lifetime.

There's some interesting things about how, look we talked about how great technology was in a lot of pieces of the home buying process. And then there's a couple pieces where, you know, I'm not saying it's not so great, but it didn't escalate as quickly as others, okay.

And, you know, I'm referring to this recent Qualia survey, where only 13% of home buyers reported having a fully digital closing process. And for me, I mean, that personally and maybe professionally, that sounds about right. There's a lot of hands in the pot in a mortgage transaction, where everyone is going to need to connect seamlessly. And here or there, there may be gaps or delays in transferring and collaborating information. And this is a big decision. And many times, at settlement, that consumer is going to want to look that agent in the eye when they sign their documents and dot their i's and cross their t's. And so, in many instances, a fully, 100% digital process may not be adopted all the time. And this is where we go back to that traditional process, right?

Now this is an industry, the real estate industry had a lot of things as the market went up or down, typically the processes really stayed the same with a couple enhancements and tweaks here and there. But this idea of a fully, completely digital process may take some time. I mean, look, 13% is more than where it was in years prior. It is growing, but this is a pretty strong claim to see that it's going to be 100% digital.

And the other thing that sort of sticks out is considering that the pandemic didn't force the experience to be 100% digital. It just rides a question like what will it take for it to be 100% digital. I'm not saying that it's . . . You know, we're not forecasting the future or anything like that, but it is something to consider, right? You know, if the pandemic didn't make it 100% digital, I mean, what will?

Another callout, 40% is using the digital signing tool, and that's sort of surprising. You know, the digital signing, you know, I would like to see that number . . . you know, you think it'd be a little bit higher than that. It's growing but not taking off. You know, when I first read this, I thought it'd be like 80%, 75%. My gosh, you know, all the things that you can digitally sign. But everybody that took this survey, they're saying only 40% actually used the digital signing tool at closing. Again, just an interesting number, higher than other years, but not necessarily escalating as quickly as some, you know, may expect.

I mean, bottom line is there's this need for interconnectivity and integration from one technology to another, and so there's really just still some more work to be done. This digital process and all the technology that's out there, we're not done. You know, there are some gaps to fill, and there's some roadblocks in the way. And we're going to get into that in the next slide.

All right. So now we're going to get into the barriers of, you know, accelerating technology adoption. And as I mentioned before, the same reasons why a lot of companies are taking advantage of technology unfortunately are the same reasons why they are not adopting to the technology. And from a sales perspective, I can tell you this list and this is data taken from individuals that did not use technology. Okay? So it's a little slanted, right? 

But this is from . . . Again, this is polling everybody that doesn't adapt to the technology, and they're really saying that budget and lack of partnerships are the leading reasons. And this does make sense. You know, the biggest piece here is really helping customers and prospects understand the ROI when you're adopting new technology. That ROI may result in, you know, replacing an employee or maybe replacing the cost of hiring another employee. And that type of red tape or action may just not be worth it. You know? So they're just not seeing how the time savings is going to result into a cost savings. And so, you know, companies will just stay put with what they've got and not pull the trigger and make the investment on something like that. You know?

And then, when you're talking about lack of partnerships, you have a lot of hands in the pot as we said before. You know, you have buyers, you have borrowers, you have agents, you have banks, all these different pieces, and they may all be using different technologies. And as you all know, there's a lot of things that have to happen in order to get a deal done and to complete the transaction. So if one part is stalled, no matter how quickly all these other, you know, 100 pieces get done, it just takes one little piece to slow down the whole transaction. So they may feel not necessarily confident that, you know, if we invest in one technology on our piece, that these other pieces are going to still be, you know, efficient to match up with my speed of getting my piece of this process done. And so there is a little bit of disconnect here from all parties that are involved in the transaction.

And I'm going to go down the list here, and most of these are definitely relevant. You know, security and compliance and regulatory. Maintaining high levels of security is expensive. It kind of goes back to cost here. But it can also be intimidating. It can also be time consuming, particularly with a lot of the red tape with satisfying some of these regulatory guidelines that are out there, to use certain technologies out there. So it's definitely a piece that is a roadblock here.

The complexity of IT infrastructure and integration and kind of goes hand in hand with kind of the last from the bottom business and IT disconnect. There may be a perceived huge commitment from a particular IT department that necessarily isn't aligned with the rest of the business. And I think this happens a lot where sometimes the IT department is siloed from the rest of the business and they're not really in agreement on whether this is something that can be done or should be done.

Lack of skills and new ideas, that definitely happens. You know, we talked about this being a traditional business and a traditional process. So just that idea of change just scares some people, and you may have some staff that maybe doesn't have the technical acumen to maybe pick up on new technologies that are out there.

Lack of corporate vision, this happens as well. You know, not really looking down the road as the rest of the businesses are adapting new technology. Because your system isn't broke, you know, you're going to continue to do things the way you do things, and, you know, that's fine.

Inability to experiment quickly. You know, we test these things, right, to make sure this technology works, and you may not have the means or resources to go ahead and test some new process there. With your staff you may just not . . . it might just not work. As your business is closing deals and things faster than the speed of light, you may not have time to hit the pause button to test something new if everything is running fine.

And then, competition from big tech and financial tech. You know, you may not be allowed to use other technologies depending on who owns who, right?

So all valid roadblocks that may be preventing companies from adopting new technology.

All right. We talked a little bit about how agents and consumers and lenders were taking advantage of technology. Wanted to just take a step back and talk about how technology was adopted at the county level.

So during the pandemic, you know, offices big and small really, you know, many of them were shut down no matter how big they were, and it caused significant amount of delays. And CSC really made it easy for a lot of these counties to receive documents in several ways.

eRecording and accepting eRecording allows offices to limit the number of resources they needed so they could use their personnel more efficiently, where they didn't have to be in the office and they could work from home and still receive our documents. eRecording also reduces rejections, which, you know, limits the amount of paperwork that you need to responding to those rejections. It reduces the need for document scanning and mailing. So counties can process these documents from multiple workstations all over the country really any time of day.

And lastly, we were able to reduce our overall operating costs. Back to the same reason why lots of other companies adopt new technology. So again, at all different levels, including at the county level technology was adopted.

Kevin: All right. Well, I wanted to give you a little info here on some of the changes we've seen with county recording times and even talk through some of the best practices. As Pete was talking about, some of the changes and adoption of the use of technology, it made me think about a lot of the material that we have prepared here and talk about some of the changes that counties have made. 

You know, CSC is in a unique position where we've been able to compile a lot of information, county recording information, and compare these electronic submission stats, you know, to what they were just a couple years ago. And it's a lot of data. You know, we cover more than 2,000 counties through our electronic network, which those 2,000 counties cover more than 87% of the U.S. population. So this is a very large view of actual, reliable data, and it's been interesting just to gauge current conditions I guess, right, post-COVID to what they were pre-COVID.

Since February of 2020, 340 new county recording offices have implemented the use of electronic recording. So they've rolled out new technologies, new processes to their entire teams. It's really been, you know, quite a heavy burden to bear because they haven't been able to do this in the traditional kind of office setting. They've gone through these learning curves. They've gone through training processes, and they've done most of it through a work from home or a remote type setting. So it's really been impressive. As some have even adopted new technology, you know, they encounter other challenges that just sort of come with that nature, right? We've even heard of very few, but a couple county offices that had experienced some cyber attacks. So you get a greater sense here of all that they've sort of encountered and the big changes that they've made.

Wanted to share some metrics here on the average recording time. So again, this is across the whole country. But really some significant improvements on average recording times. Again, this is just for electronic submissions. But we saw a dramatic improvement in the speed, right? Average time for electronic recording in Washington State, in Louisiana, both over an 80% improvement, right, from pre-COVID to now in average recording time.

The state of Ohio, and again these are averages, it's across multiple counties, it's across thousands of documents, but the state of Ohio, those counties increased their speed, right, of 56%. Georgia 51%. California improved speed on average recording time of 36%. So really significant.

And, you know, I suppose it's accurate to say least improved, but I'll throw a caveat in here. These next states may have had the least improvement, but they're also states where they're averaging less than a day in average recording time. So that's pretty impressive already. And some of those states were Florida, Illinois, New Mexico, Texas, Maine, and Indiana. So we're really nitpicking, right, that they may have seen the least improvement, but again they were already better than within a day of average eRecording times. So just great to see the improvements there and the adoption of technology.

Some other factors to consider here as we dig into best practices. It's important that the lenders, you know, are able to meet certain compliance timelines. And one of the things that, you know, CSC and our services are able to do is help them provide borrower notification letters, right, help them even meet state compliance deadlines of when a mortgage satisfaction needs to be recorded, you know, so many days within once the loan is paid off. So those are factors to consider too and how a lot of these technological advancements and adoption of digital processes can help even the lenders, not just settlement agents.

Title underwriters, they're recommending eRecording as a best practice. You know, it helps them shorten the title insurance gap, right? And then even some real industry stakeholders and the American Land Title Association and PRIA, the Property Records Industry Association, they're even strongly recommending eRecording as a best practice for settlement agents to undertake and put within their processes. So overall lots of adoption, but lots of improvement too over the last two years we've seen this adoption of technology.

Pete: All right. Our county activation teams have been working around the clock in response to the pandemic over the last couple years. So last year we added over 200 plus new counties that are now accepting documents with CSC, and here's some of the highlighted counties here. Calcasieu Parish, about a population of almost 200,000. Yolo County, California solidifies us as having the biggest eRecording network out in California. So definitely take advantage of our services on the West Coast. Richmond City, Virginia, at 300,000 in population. Anchorage, Alaska, CSC is now eRecording in the entire state of Alaska now. And Lake County, Indiana, at a population of almost 500,000.

So our eRecording network overall currently stands over 2,000 counties, and we're projecting well over 2,300 before the end of 2022. And just to highlight and in a callout, I'm not doing my job if I don't. We did add Gwinnett County, Georgia this month and Orleans Parish, Louisiana this month as well. So the county network continues to grow every single year. We're currently at 87% of the U.S. population, and that number gets bigger and bigger every month.

Kevin: Okay. So wanted to give a quick update here on we referred to these as these funny acronyms, you know, that are now created out of, you know, for everything, but RON, RIN, and beyond, all of these various electronic notarization types. This has been one of the things, one of the pieces, right, to a fully electronic process for a fully digital mortgage that's needed to be in place.

We know that these notary acknowledgements need to happen electronically or remotely and that there's actually been many states that have signed, you know, some form of emergency authorization. Some states have actually enacted bills where legislation is in place now providing a way for them to complete this part of a closing process electronically. And we're going to go through here on the next slide just some of the details. But it's important to keep a few things in mind.

Although a state needs to have, you know, legislation in place and your organization needs to be aware of, you know, the differences between RON and RIN and IPEN and eNotary, it's important that other parties approve of the transaction being completed this way. Specifically, GSEs need to have some acceptance and authorization, you know, that the loan be closed using this form of technology.

Some counties may even be a bit unique and quirky, where although state legislation may be in place, some counties aren't familiar with it, aren't comfortable with it. It's new to them, so they might resist a bit. We've seen that caveat, right, for some of these settlements that are happening electronically with some form of remote online notarization.

And then even underwriter approval, right? There's a title policy issued in the transaction. Obviously, the underwriter is going to need to authorize the use of that technology for the transaction to be completed.

And then there's even a federal, you know, bill that's being reviewed. It's called SECURE. But it's essentially, you know, something that I think we're all looking forward to in the industry. It'll provide some uniformity and consistency. I think that's been part of the challenge across the country is so many states have enacted some legislation, but they've really been a bit different than one another. So it's been hard to implement a consistent technology and process when various states require different things.

You know, conclusion is RON is here to stay. This will be and is a valuable technology that will continue to be used more and more and more. But there's some tightening up, right, that I think will be beneficial to the industry as we see a federal bill in place, or not just a bill but legislation in place and that states can maybe even use that as a model to really make things a bit more coordinated and provide some consistency across the whole country.

Okay. So referenced all these acronyms, and now here's a really handy and useful chart that ALTA has put together, the American Land Title Association. But it goes through some of the unique traits and elements I guess of the various notarization types mentioned. 

I mentioned RON, and that's probably been the more widely used term for, you know, remote online notarization. But you can see the different dispositions or technology uses or needs, you know, that make up a RON technology. There's even a paper remote online notarization. So PRON is another where you'll see how it varies in the types of documents that can be, you know, remotely notarized.

There's RIN, where the use of camera is utilized, which allows that notarization or sort of physical verification to occur through AV equipment, right? 

There's the traditional wet ink notarization, TWIN. Here's another one of TWIN. But then even the in-person electronic notarization of IPEN and just the different variations where some use a retained, recorded copy of the transaction, right, to the use of cameras and mics. Some do not. Some are required to happen in person. Some can happen completely remotely. But nonetheless this is a handy tool and would encourage you to go back to ALTA's website and reference this if it's a process that you want to implement into your organization.

Okay. And I had touched on some of these just a moment ago, but ultimately these are things that need to be in place, right? Most states do have one of these in place. As I mentioned, 37 states do have permanent RON laws in place. Other variations with emergency authorization still. But ultimately, those are the things that need to be put in place first. 

And I think, as Pete talked about, technology and adoption, oftentimes unless a fully digital process can be utilized, if one part of a closing or settlement has to happen in the traditional or manual way, many closing agents often just kind of assume, hey, if I've got to pull this out of the digital process and process this thing, you know, traditionally, I might as well do many parts of the process the traditional manual way. So again, as all these things come together, I think that's when we'll see an even greater adoption of technology and a fully electronic closing and a greater percentage of digital mortgages.

But as we mentioned before here, just be sure that there's the county support, underwriter approval, and the GSEs are accepting of that type of technology for the loan that you're closing on. 

And then be aware of the various solutions that are in place. You know, counties have different processes with eRecording. They've had to modify how they do things with staging their intake process, right, when they'll be open to accept walk-ins, when they'll accept mail believe it or not, what queues they create for electronic processes, and when their staff, you know, is allocated to perform certain recording tasks in those various queues. So we just have to continue to adapt a bit to some of these variations across the use of different technologies and across the various pieces of a closing or a settlement. 

We do know that there will be continued expansion of various document types. Some states have restrictions that eSigning or RON cannot happen for certain types of instruments, like a deed or a security instrument. But for other types of documents, they're permitted. So be mindful of that.

But ultimately, these things really do provide a greater client experience. They provide efficiencies, cost efficiencies, but also time efficiencies. And as we all sort of do more to step up and be brave and adopt more of this technology, we do realize that immediate improvements happen, but even, you know, long-term and further refined improvements occur. These technologies end up being sort of a gift that keeps giving.

So, you know, we're excited and eager to see how all these things play out, but essentially, you know, there's been significant progress and adoption of technology so far and anxious to see how the rest of things play out.

Pete: All right. Going digital with eRecording. So first, what is eRecording, right? Well, eRecording, it allows submitters the ability to process and transmit electronic real estate documents, over our secure web network, directly to the county recording offices across the nation. If you're on this call, at some point you're likely filing your documents this way, and you might not be now, but that's fine. But to keep up with the trend, it's really headed that way. So you should be eRecording at this point, and, hopefully, you're doing it with CSC.

So why do customers eRecord? Well, they do it for cost savings, right? You know, reduce and eliminates labor, postage, courier costs, and materials costs. We do it for the time savings. You know, we submit these documents in seconds, shortening the time gap to recording, and this will protect your lien status and meet your filing deadlines.

eRecording also offers a 100% secure transport, so you never lose control of your documents, and eliminates the risk of anything being lost or damaged or altered in transit.

There's fewer payment errors. CSC will pay the fees based off the recording receipt for an accurate and secure, timely payment. It's also a simplified payment, so it eliminates the cost to produce and sign checks and match them up to those documents.

It also offers a very low rejection rate. So it's much lower than paper submissions, and it's less than 1% rejections for L3 documents. There's a very efficient rejection management system. So when you do receive a rejection, you'll receive that back. You have the ability to correct it. You'll be able to return that rejection corrected in hours rather than waiting days and going through that paper process back and forth for a document that was rejected.

All this and you get world-class customer service with our company, and it's all in a very secure environment so you know that your documents are safe. 

So CSC does more than just eRecording. We really have some newer services that picked up in 2021, and here's a menu of our comprehensive digital solutions from CSC. 

So our property search services are pretty much our most popular ancillary product right now. Our search services are integrated with our eRecording platform, ePrepare. And it gives you the ability to obtain property information, such as the owner name, summary of property tax information, APN and PIN numbers, long and full legal descriptions, full vesting information, such as like the borrower's legal name, last market sale details, like the sale date, the sale price of a property, homeowners association information if it's available, and it also gives the ability to search some recorded document images if they're available.

So our document retrieval service enables you to obtain some of these images, including things like the last transfer document, like a copy of the deed, or perhaps the last finance document, you know, like a mortgage. So bottom line is if it's filed at the county electronically, we may be able to get this document to you in a matter of seconds instead of going down there and having to retrieve it in person.

We offer commercial document templates. So if you don't have your own templates, you know, the same way we can help you with the residential templates, we have some commercial templates in there as well.

We offer a Signer Manager tool. This is an enhancement. This is an electronic service that allows you to generate, execute, and transmit documents to the county for a completely electronic process.

We offer eTrustee services. This is an integrated and direct capability that allows you to engage a trustee for a signature or for a substitution or reconveyance document. This streamlines the lender's process of signing, substituting, and recording a reconveyance of a deed of trust.

Then we have deed of trust lookup in Colorado. So when recording a release or a deed of trust in Colorado, our lookup service will retrieve a copy of the necessary original deed of trust. This service then electronically sends a release to the accompanying deed of trust to the public trustee to review and verify. Once verified, the release will be sent electronically to the county for recording.

We offer custom email notifications. So CSC will prepare and can automatically notify our customers by email when their recorded document returns from that jurisdiction. The notification also adds value, sort of like a personal touch by sending the identified parties a recording notification on your own company's letterhead. So these are very customizable to send these notifications out to your customers.

And then we have borrower notification letter services. These services communicate important information to your customers when documents are recorded. While these letters are typically associated with releases, CSC provides this service for all document types.

Again, we do a whole lot more besides eRecording, and we hope you're taking full advantage of all of our services. So if you have any questions, feel free to reach out to our Sales Department.

All right. Why CSC? So customers partner with CSC for four reasons and in no particular order. The first one we're going to talk about here is technology, right? And we're in a unique position here, where we have extensive integration capabilities with a number of title software partners, and some of them but not limited to SoftPro, Resware, RamQuest, AccuTitle, and many others that we work with. But we also offer other custom integrations as well. So if you're working with a specific type of software, schedule a call with us and let us know. We may already have something in place or can create something where we can partner and work together and streamline some processes for you.

Number two is service. We boast the highest NPS scores in the industry. We have a service model for our clients that is second to none. Every customer receives an account manager, and we really take pride in ensuring that if you have a question, it can get answered, you know, right then and there. We offer, you know, online chat services or staffed appropriately to make sure we're covering you during regular business hours. And again, we follow the NPS score model, and we take pride in boasting the highest NPS scores of all of our competitors that are out there for these types of services.

The second (sic) reason is trust. We currently represent, as I mentioned at the beginning of the call, over 90% of the Fortune 500. Look, we're a 100-year-old company. We're not going anywhere. We are extremely stable. You don't have to weather the storm with some company that may not be unstable (sic) or maybe undergoing, you know, significant service changes within their organization. The Fortune 5, they trust us because we're a great company and we deliver on our services.

And lastly is cost. Look, we are a for-profit. We may not necessarily be, you know, the cheapest provider in the industry, but we are very competitive with our services and our pricing. And so, you know, typically we'll tailor our pricing around, you know, your short-term and long-term volume and come up with something that's fair for both of us.

And so if you haven't partnered with CSC yet, give us a call and let's do some business.