New Resolution Could Help Counties Adopt E-Recording
The National Conference of Commissioners on Uniform State Laws here has passed the Uniform Real Property Electronic Recording Act that would authorize records officials to take steps to accept and store records in electronic form provided that the act is made into law by the states.
The NCCUSL is a national organization that represents the 50 states as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Specifically, it is made up of attorneys whose charge is to draft laws that are uniform for all states in the country where controversy exists from one state to the next on a certain practice or statute such as the issue of e-recording.
"A good percentage of residential mortgages are sold across state lines, so it would be very helpful for the industry to have electronic processes to both file those loans in the land records and to both search and retrieve the information in those land records electronically," said David D. Bilken, who chaired the drafting committee on URPERA. "There is over 3,000 recording offices in the United States, and this act attempts to make it possible for all of those parties to move into the electronic age because most state laws require that the recordation of loans be in ink on paper of certain sizes with certain margins.
"With laws like this in place, there's a major barrier to electronic recording," he continued. "These are areas where the federal government has not acted on so the organization felt that we could take it upon ourselves to draft an act that would take into account the needs of the individual states and be uniform at the same time."
The act removes the barriers to e-recording in each state. Specifically, it does not require any state or recorder to move toward e-recording, but does say that if an individual state has any laws on the books that would prohibit e-recording, those laws no longer apply to the mortgage industry.
So, as long as the e-recording method used in that state meets the requirements of the act, that process would be considered valid. The standards that the act sets up are as follows: each state is directed to create an e-recording commission; the commission in turn is required to set up standards in each state that address the particular needs of that state's local recorders.
While most admit this is a positive step forward in the ultimate acceptance of e-recording, the act does not address all the relevant issues to make e-recording a common practice. The authority to establish standard real estate document forms, record by reference to such forms, to fix appropriate fees for e-recording and to collect those fees are not detailed in the act.
"Each state when they go ahead with this act will have to go back and look at their own recording statues to see which have to be modified so they are no longer in conflict," said Mr. Biklen. "Also, they have to decide which kind of recording commission they want to set up. Each state will also have to decide how to fund the commission."
The next step is that the act will go to the various state legislatures to act on by this fall. Mr. Biklen believes that action will be swift on the state level.
The main obstacle in the way of moving toward complete e-recording has been an inability on the county level, according to Scott Cooley, founder of Contour and a former executive at Dublin, Calif.-based Ellie Mae. "The problem with electronic recording is that the paper shuffling all ends up in the county recorder's office and they have been the last participants in the mortgage process to embrace electronic documents and signatures," he said. "Anything that can be done to get the county recorders to go electronic and get digital would help the industry a great deal."
"The fact that the NCCUSL came to a conclusion on this topic as a governing body however is saying that they see a need for e-recording, and is validation of the move toward an e-mortgage," added Tim Anderson, executive vice president of business solutions for Dexma, Edina, Minn.
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