Electronic Recording Gaining Steam
Electronic recording is picking up momentum as more counties come online and could soon be the common way of recording a loan, panelists at the 8th Annual Mortgage Technology Conference here said.
"We on the county level simply see e-recording as a new medium," said Anne Richards, the deputy director of county records for Broward County, Fla. "We see it as a way of interacting with a business partner to make the process more efficient. We'll accept submission of a digital doc and return it to our trusted lender business partner once we've checked and recorded it."
Broward County began doing e-recordings in July of 2000 and has recorded 10,378 loans. Ms. Richards called e-recording "a necessity."
Broward County processes 5,000 documents a day, she said. "We've had to process a growing number of mortgages throughout the refi boom with the same staffing. So, this streamlines the process and makes us much more efficient. In the end, if this helps us cut our processing time we feel it inevitably does the same for the lender as well."
It took Broward County only three hours to process its first paperless mortgage.
"E-recording and e-notarization are the most significant steps to achieving the complete e-mortgage," noted Carmen Bramante, co-chair for PRIA Technology Committee. "As MISMO releases DTD standards to support e-closing, including e-signing and post closing processes, the whole system will flow much smoother."
At present three types of e-recording are used: transmitting a scanned document, transmitting images and data from a document and finally transmitting a complete SMART Doc. The most common form used includes the transmission of data and images to the county recorder, with everyone in the industry pushing to get to the point of being able to deliver a more complete SMART Doc. Right now 60 jurisdictions do e-recording and another 20 will come online by the end of the first quarter.
"The challenges some counties face in accepting e-recording are implementing new systems to accommodate the new type of file, making sure the data is compliant and developing a new system to connect to their industry infrastructure," said Mr. Bramante.
For one, Navy Federal Credit Union will only process paperless loans. "When making the decision to use e-recording the lender should first understand their current process in and out," said Susan Kihl, manager, mortgage servicing support branch at Navy Federal. "If the lender understands each step it's easy to automate the process with e-recording to become more efficient.
"In deciding what to automate to make this happen it's important to concentrate on what makes sense," she continued. "E-recording and automation in general should be a way to standardize the steps in the process for the lender and make things move quickly from start to finish."
Navy Federal stresses the importance of open communication with the recorder to make the transition painless. "Lenders should talk to recorders to see how they want to work," said Ms. Kihl.
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