The Basics of E-recording
In 2018, the U.S. Treasury offered several recommendations to improve the electronic closing and recording process. Among them, the Treasury said that recording jurisdictions that don’t recognize and accept electronic records should implement the necessary technology updates to process and record these documents and pursue digitization of existing property records
Earlier this year, Kentucky passed Senate Bill 114, which reforms the state’s recording and notary laws. Beginning Jan. 1, 2020, county clerks can record real estate deeds, mortgages and other documents electronically, while notaries public will be able to notarize real estate documents electronically and remotely.
Here’s a FAQ provided by eRecording Partners Network that breaks down e-recording, how the process happens, what companies need to e-record and the benefits.
Is E-recording legal?
As of 2015, all the states in the nation have approved one or both of the following acts:
The Uniform Electronic Transaction Act, or UETA, establishing the legal equivalence of electronic records and signatures to the traditional paper documents and wet ink signatures
The Uniform Real Property Electronic Recording Act, or URPERA, authorizing local land records officials to accept records in the new electronic format. The only state not offering eRecording is Vermont. Rhode Island came on line 1.1.19. Kentucky will start 1.1.20.
The first e-recording was processed in 1999, 20 years ago. The number of jurisdictions across the nation that accept e-recording continues to increase. According to the Property Records Industry Association (PRIA), over 85 percent of the U.S. population resides in jurisdictions that e-record. That’s almost 2,000 jurisdictions nationwide.
The Physical Process
The best way to describe the e-recording process is to think of the internet as an electronic version of your current courthouse runner or FedEx package. E-recording is another document delivery option. The documents are scanned, become images and are submitted securely via a secure internet website to the courthouse. The image is recorded at the courthouse and returned to you through the same secure internet connection.
Documents are scanned and submitted via the internet.
The actual recording is still done by the recorder’s office inthe recorder’s software system (LRMS).
Submitter receives an image with the recording stamp and information displayed. This is now the original document.
E-recording takes minutes or hours, versus days or weeks.
Rejection are reduced and turned around more quickly.
What Do I Need?
To use e-recording, you need a computer running a current internet browser, access to a scanner and access to high-speed internet. Many of the popular title and closing software packages also integrate with e-recording vendors to help you save time and steps. In addition, you need a contract in place with an e-recording vendor. The contract will set you up as a qualified submitter and outline the payment process for the recording and submitting fees.
How Does It Work?
With most vendors there’s no software buy, install or set up. Once a closing has been completed, you scan the documents and store them on your computer. You then access the vendor’s web portal and upload your scanned images. The county may also require you to enter some identifying information about the documents for tracking purposes.
The system will encrypt and securely transmit the documents to the courthouse. Once received, the jurisdiction records the documents and returns them securely to you with the recording stamp and other appropriate information. This process is typically completed in minutes to hours versus days or weeks.
Most people then print out the first and last page of the recorded document and attach them to the original documents which never left your office. This package can then be sent to the final destination, whether that is the title insurance company, lender or new owner.
Why Submit Documents This Way?
There are several reasons to consider e-recording. The biggest reason is to reduce the turnaround time. The shorter turnaround time is also an advantage if a document is rejected. You can address issues more quickly and resubmit documents the same day. Shorter turnaround time also reduces the gap period. Submitters who deal with multiple counties can eliminate the need to have escrow accounts at each county or to issue and process individual checks for each transaction. Some submitters have also reduced their delivery and return fees by e-recording, but it depends on how your office business processes are set up. E-recording also creates an electronic record of when documents were submitted to the county and returned to help you comply with Pillar four of ALTA’s Best Practices.
Speed! Same Day Recording
Lower Chance of Document Loss
Security: Doc integrity. Encryption. Secure Network. Less Fraud.
Faster Problem Resolution. No Fee Rejections.
Improved Customer Service
Regulatory and Lender Compliance
ALTA Best Practices Pillar #4
What If the County Rejects Documents?
If a document is rejected, you are not charged for recording fees or the transaction fee. The document is returned to you a rejection reason from the county. You can then make the needed correction and resubmit the document. If one document of a multi-document package is rejected, the whole package is returned to you so that you can keep the integrity of the document recording order.
The most common reasons rejections are image quality and not meeting the county document margin requirements. Each county has their own margin requirements based on where they place their stamps. Many vendor systems store the requirements for each county by document type, and displays an on-screen guide or template that shows those specific requirements. If potential issues are identified, the software provides you tools for error correction within the software so most of the time you do not need to rescan the document.