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Mechanics of Electronic Recording Presented by Todd R. Hougaard President & CEO

Doing Business with Digital Documents. Mechanics of Electronic Recording Presented by Todd R. Hougaard President & CEO. A Discussion on … Technology and Policies. Processes/Policies. Electronic Recording is ... 30% - Technology 70% - Policy.

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Mechanics of Electronic Recording Presented by Todd R. Hougaard President & CEO

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  1. Doing Business with Digital Documents Mechanics of Electronic Recording Presented byTodd R. Hougaard President & CEO

  2. A Discussion on … Technology and Policies

  3. Processes/Policies • Electronic Recording is ... • 30% - Technology • 70% - Policy

  4. Presentation Outline Mechanics of Electronic Recording • Legal Requirements • A Review of Electronic Recording Technology • Processes and Policies • Defining Electronic Recording Policies • Security • Demonstration

  5. Enforceable? Doing Business with Digital Documents Legal Requirements

  6. Legal Requirements • Uniform Electronic Transactions Act (UETA) • Currently adopted by 24 states (as of 3/01) • In consideration by additional 22 • Electronic Signatures in Global & National Commerce Act (E-SIGN) • Signed June 2000 • In effect October 2000 • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  7. Legal Requirements • State • Laws • Policies • Guidelines • Fraud and Forgery Deterrence • Security of Digital Documents • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  8. Flash from the past! Doing Business with Digital Documents A Review of Electronic Recording

  9. eDocument Technology • Paper Era (1630-1950) • Printed Form • Typewriter • Modern Era (1950s) • Microfilm/Microfiche • Computer Era (1970-2000) • Computerized Indices • Computer Imaging • Paperless Era (2001 +) • XHTML—Data/Display Format • Digital Signatures • Legal acceptance of Digital Documents • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  10. XML PDF TIF XHTML Word RTF Word Perfect eDocument Technology • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  11. eDocument Technology • XHTML - (XML & HTML) • eXtensible Markup Language • Readable by computers • HyperText Markup Language • Code used to view an internet page • Readable by human eyes • Combination Creates “Smart” Documents • Humans and computers can read • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  12. eDocument Technology • XHTML (digital documents) • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration Human View DEED OF RECONVEYANCE Lot 21, Murray Bluffs Subdivision, according to the official plat thereof, on file in the office of the Salt Lake County Recorder. 21-23-153-001 Computer View <InstrumentType code="Recon">DEED OF RECONVEYANCE</InstrumentType> <LegalDescList> <LegalDescBlock LDidref=""> <Lot Rcrd="" fill="textbox" tooltip="Lot">Lot 21,</Lot> <Subdivision Rcrd="" fill="textbox" tooltip="Subdivision">Murray Bluffs Subdivision,</Subdivision> <Township Rcrd="" fill="textbox" tooltip="Township/Block"></Township> <Range Rcrd="" fill="textbox" tooltip="Range/Plat"></Range> <Section Rcrd="" fill="textbox" tooltip="Section"></Section> <QtrSection Rcrd="" fill="textbox" tooltip="Quarter Section"></QtrSection> <QtrQtrSection Rcrd="" fill="textbox" tooltip="Quarter Quarter Section"></QtrQtrSection> <Meridian Rcrd="" fill="textbox" tooltip="Meridian"></Meridian> <LegalDesc Rcrd="" fill="textarea" tooltip="Legal Description"> according to the official plat thereof, on file in the office of the Salt Lake County Recorder.</LegalDesc> <ParcelNo Rcrd="" fill="textbox" tooltip="Parcel Number">21-23-153-001</ParcelNo> </LegalDescBlock> </LegalDescList>

  13. Dear Customer, It has been our pleasure to serve you. We eagerly anticipate a successful project. We will contact you next week to schedule a launch meeting. Sincerely, Todd Hougaard Digital Certificate File- Public Key <Certificate Base64value= "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 Electronic Signature Choices • Typed • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration • Digitized – UPS or FEDEX • Digital

  14. Digital Signatures • How… • Mathematical Equations • Documents Read by Computer as Numbers • Example: Todd = 1001110000110 • Digital Certificate • Two Very Large Prime Numbers • Private key – Known only by the person signing • Public key- Used to “unlock” a signature and validate • Authenticated by Certificate Authorities • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  15. Digital Signatures How do I digitally sign a document? • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  16. Digital Signatures How is a digital signature verified? • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  17. Digital Signatures • Digital Signatures Provide… • Signer Identity • Document Integrity “tamper proof” • Formal Legal Compliance Equivalent to Ink • Efficiency – Computer examination • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  18. Digital Signatures • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration Ingeo Educational Series

  19. In Context! Doing Business with Digital Documents Processes and Policies

  20. Processes/Policies Standards Groups • MISMO- Banking and Mortgage Industry • AARTT- Alliance for Advanced Real Estate Transaction Technology • Property Records Industry Joint Task Force – NACRC/IACREOT • California XML Standards Group • Legal XML Note: Corporate Techies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  21. Recording Stakeholders Recorders Notaries Signer Judges Large Lender Large Volume Loan Servicer General Public Local Government Office Title Insurance Underwriter Title Plant Operator Processes/Policies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration • Prosecuting Attorney • Closing Attorney • System Providers • Small Lender • Small Volume Loan Servicers • DBA Filings – Business • State Tax Offices • Misc. Private Sector • IRS Tax Lien Office

  22. Stakeholder Interests Integrity of record Record permanence Security Non-proprietary Access to records Trust Processes/Policies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  23. Processes/Policies • Recorder’s Customers • Closing Attorneys and Agents • Title Agents • Title Plants • National Mortgage Lenders • Top 10 do 55+% of all mortgage lending • National Mortgage Servicers • Local/Regional Banks and Credit Unions • Other Government offices • Treasurer • IRS • State Tax • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  24. Processes/Policies • Customers’ Interests • Ease of adoption • Benefits • Automation • Increased efficiency • Competitive advantage • Uniformity – multiple locations • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  25. Processes/Policies • UETA requires that parties “agree on how to do business” … • Law = broad boundaries • Must define and agree on industry policies • Policies are not laws • Policies define guidelines • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  26. But we’ve always done it this way! Doing Business with Digital Documents Defining Electronic Recording Policies

  27. Defining Policies • File Format Criteria • Presentation/Viewing/Display • Proprietary vs. Open • Processing ability/Performance • Records Quality/Permanence/Archive • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  28. Defining Policies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  29. Defining Policies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  30. Defining Policies • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  31. Processes/Policies Customer Considerations High Difficulty Closing Attorneys and Agents • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration Title Agents Local/Regional Banks Treasurer Low High Benefits • Automation • Increased Efficiency • Competitive Advantage Nat’l Mortgage Lender IRS State Tax Title Plants Nat’l Mortgage Servicer Low Difficulty Ease of Adoption • Fit Existing Systems • Training Requirements • Access

  32. Processes/Policies eDocument Considerations • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration TIF Multi-File XHTML Proprietary Adobe Vendor Dependent W3 Internet Standard Longevity mid 1980’s Vendor Sys Dependent 1960’s Doc Data Source Typist Data Linked to Doc Data Contained in Doc Automation Ability No Scanning Data Entry Complete End-to-end Processing Speed Typist Speed Depends Processor Speed Print/Display Tools TIF Viewer Vendor Internet Browser

  33. Electronic Signature Policy • Purpose of Signatures* • Evidence • Ceremony • Approval • Efficiency and Logistics *American Bar Association • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  34. Electronic Signature Policy • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration “The statute of frauds of the common law tradition, for example, does not render a transaction invalid for lack of a “writing signed by the party to be charged,” but rather makes it unenforceable in court …” American Bar Association

  35. Processes/Policies Electronic Signature Policy High Difficulty • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration Digital Digitized Low High Document Authentication Typed Low Difficulty Signer Authentication

  36. Processes/Policies Digital Certificate Policy High • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration Recorder (Licensed CA) Licensed Notary CA (ARCANVS) Signer Transport Low High Easy to Access Low Self-Generated Trust

  37. Processes/Policies Document Integrity Policy • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  38. Just how secure is it? Doing Business with Digital Documents Security

  39. System Security • Receiving system isolated from other systems? • Protected against system failures? • Disaster Recovery • Encryption • Transmitter Identity • Legal Requirements • Review • Electronic • Recording • Processes and Policies • Defining • Policies • Security • Demonstration

  40. Thurston County, WA • County • County Recorder, County Records Manager, Recording • Assistants, County IS/IT Staff • Title Companies • Chicago Title • Pioneer Title • Transnation • Certificate Authorities • Digital Signature Trust Co. • ARCANVS • County Software Vendor • Eagle Systems

  41. The Value of Time Paper Electronic • Prepare documents(5-10 minutes) • Execute documents & fee prep (5 minutes) • Delivery (½ to 5 days) • Recorder processing (½ to 21+ days) • Return delivery (½ to 5 days) • Enter documents into system(½ to 21 days) • Prepare documents(5-10 minutes) • Execute documents & fee prep(5 minutes) • Delivery(< 3 seconds) • Recorder processing(< 20 seconds) • Return delivery(< 3 seconds) • Enter documents into system(< 10 seconds) 2-42+ days, Some errors < 15 minutes, Minimal errors

  42. Demonstration

  43. Contact Info Todd Hougaard President & CEO Phone: (435) 755-9837 E-mail: thougaard@ingeo.com

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