County Recorders Increasingly Embrace Electronic Commerce
While many have contended that county recorders are a hurdle to e-mortgage adoption, that is no longer the case. About 50% of loans done today can be e-recorded, and county recorders are waiting for lenders to realize the benefits and embrace this technology shift in mortgage lending.
"The big message for e-recording is that it is open for business," pointed out Encomia president Andrew Dubinsky. "There are a few more counties that have come online and have invested in systems. However, they want to see activity.
"Today there are a number of lenders doing e-recording around lien releases for example. Some lenders are doing e-recording on the deed as well. That's in a lot more counties than people believe. You can e-record about 50% of the mortgages in the country today. That's a critical mass and the title companies are on board as well. It's a function of lender demand now," he said.
The return on investment when embracing e-recording is equally as clear. "There's an easy pick up with e-recording," reported Mr. Dubinsky. "On the e-mortgage front it's nice not to have any paper. This completes the paperless movement in that there's no paper at all, its not paper being scanned. If the borrower is signing online and the lender is doing e-notes, that's a big win. Some people have thought the lack of adoption on the county level was a barrier, but that is no longer true.
"There are a number of vendors in the e-recording space that have their ear to the counties. No one vendor has all of the counties in all of the places with all of the functionality. As a lender you need to look at where you do business and which vendor has good overlap with you," he noted.
"You need to ask which areas the vendor is connected to and if that's a direct connect or if it's there by a third-party connection. You'll pay more if it isn't a direct connect. There are a number of different types of e-recording so it's important to know what capabilities the county has and which methods of e-recording they support. Some require images, others require SMART Docs," said Mr. Dubinsky.
"If you're talking about e-recording lien releases, it's a quick transition. In the end, the transmission to the county is saved and the employee is no longer needed to sign anything. There are also production costs that are saved, which depends on how efficient the lender is to begin with," he said.
Encomia and others act as a middleman between the lender and the recorder to help facilitate the process with little heavy lifting required of the lender. "We manage the connection to multiple recording companies," said Mr. Dubinsky. "We take the e-document and hand them off. We store all the information about those third parties in our system so we can get the note there in the form that they require. From a business perspective, the lender needs to rollout in a region, create a vendor relationship and we handle the integration and pass-on from there."
And the results are being felt in terms of reduced cost and increased efficiency. For one, Bexar County, Texas, started e-recording in October 2004, said Tim Anderson, vice president of business development, in charge of the e-mortgage initiative at Stewart Transaction Solutions as part of a WebEx sponsored by Advectis on paperless processing.
"Currently 70% of title recordings are paperless there. They reduced operating expenses by 40%. In terms of productivity, they went from processing six to 12 policies a day the paper way to 12 to 24 a day by embracing electronic processes. In total, the county generates 320,000 documents a year and e-records 121,600," he said. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com