This is a summary of the Boston Bar Association’s recent seminar, E-Recording: Practices and Pitfalls, a Roundtable Discussion, which I moderated last week. The speakers were:
- Hugh Fitzpatrick, Esq.
Appointed Board Member, Registry of Deeds Commission, Fitzpatrick Law, P.C. - Brian Kilfoyle
Regional Sales Director Simplifile - Sara Supple, Esq.
Massachusetts Associate State Counsel, Chicago Title Insurance Co.
Current Statistics
Electronic recording (e-recording) of deeds, mortgages and other title instruments has been available in Massachusetts registries since 2007. E-recording capabilities are now fully operational in every Massachusetts registry of deeds except for Bristol South (Fall River/New Bedford). E-recording is proving to be less expensive and faster than the traditional method of recording by sending a title examiner down to the registry of deeds to wait in line. In most cases, a transaction can be “on record” within 30 minutes of an in-office closing. It also eliminates the need to hire a courier or fight traffic and hold closings at Cambridge or other hard-to-get-to registries. E-recording is legal and binding, and accepted by Fannie Mae, Freddie Mac and virtually every major lender.
Middlesex South District Registry in Cambridge (which happens to be the 6th largest registry of deeds in the U.S.) leads the state in total number of documents electronically recorded and also has the lowest average recording time in the United States. Very impressive!
Electronic recording adoption rates have steadily increased with Middlesex (Cambridge and Lowell) leading the way at 40% of all recorded documents. That means, however, that 60% plus of registry business is still done through the traditional in person recording method.
E-Recording Process
As outlined by Brian Kilfoyle of Simplifile, one of the approved vendors for Massachusetts e-recording, the process of e-recording a document is relatively straight-forward:
- Sign up with one of the registry’s authorized electronic recording vendors (Simplifile, Erxchange,Ingeo/CSC, or New England Title/Escrow). There is a $350 annual fee.
- Scan original document to create an electronic image (pdf)
- Log on to the secure website and enter data about the document and upload the document image
- Perform a quick online title run-down to ensure no title issues have arisen since the first title exam
- Press “send to the registry” button
- The registry verifies the quality of the image and the accuracy of your data
- Once accepted by the registry, the document is officially “on record” with recording data and document image immediately available on the registry website
- The filer immediately gets an electronic receipt with all recording information along with an electronic copy of the recorded document.
- Fees are paid by electronic funds transfer from the closing attorney’s bank account. There is a $5.00 surcharge for every e-recorded document which is typically passed along to the responsible buyer or seller.
Title Insurance and Gap Coverage
One of the earlier concerns about e-recording is the so-called “gap coverage” — dealing with the risk of an attachment or other lien recorded on your title while you are in the process of e-recording. As confirmed by Sarah Supple of Chicago Title, all Massachusetts owner’s title insurance policies will automatically protect the title agent (attorney) and the owner from any intervening liens recorded during the electronic recording process. Ms. Supple noted that the risk of an intervening lien was just as high when the title examiner is physically waiting in line as opposed to online.
Practice Pointer: Ms. Supple recommends that closing attorneys perform one run-down right before submitting the document into the e-recording “queue” and also a “mini-run down” right before disbursement of funds.
Fortunately, a survey of participants at the seminar revealed zero instances of an intervening lien/attachment filed in an e-recording situation.
What’s Next?
Hugh Fitzpatrick updated the audience on recent and future developments. As a member of the Registry Technology Commission and advocate, he is working with the Registries, Legislature and Governor’s Council on electronic notarization so documents can be signed and witnessed virtually in a secure system like DotLoop or Docusign. Another goal is to have all of the registries unified in their document search portals like masslandrecords.com. Right now, several registries have their own systems. Hugh also noted that the new CFPB rules are strongly encouraging electronic signing and recording.
Electronic recording is a very exciting development in the real estate title industry, proving to be cost-efficient, accurate and convenient for all parties to the transaction. My Needham office is fully e-recording capable, and we often have the documents recorded within 30 minutes of the closing.
Please note that the BBA Real Estate Section’s Next CLE is Real Estate Attorneys, Are You Ready for CFPB Compliance? Nov. 18, 2014, 3pm at Boston Bar Association. Click here for more info and to register.
