Technology Primer

1
Technology Primer

• 2007 PRIA Annual Conference
• Charlotte, NC
• 7/22/2007

2
Todays Presenters

• Mark Ladd
• PRIA Technology Coordinator
• Harry Gardner
• Senior Director, Industry Technology, Mortgage
  Bankers Association

3
A Few Basics

• Why Use XML?
• eSignatures
• Legal Foundations
• Models of eRecording

4
Why Use XML?

• Used by most software today
• Universally accepted and utilized
• Text-based, human-readable
• Extremely flexible
• Separates presentation (markup) from data
• Same data, multiple outputs
• Web browser
• PDA mini-browser
• Cellphone text display

5
eXtensible Markup Language

• Text-based, human-readable
• Tags identify each field as data
• ltBorrowerFirstNamegtHarrylt/BorrowerFirstNamegt
• Defines rules for tagging data
• Pre-defined standard transactions
• Extend standard transactions with custom data,
  without breaking them
• De facto standard for data communications via the
  internet

6
DTD vs. Schema

• DTD Document Type Definition
• Defines rules for elements, attributes, and
  relationships between elements
• Provides a consistent rule set that can span
  multiple documents
• Syntax is different than XML

7
DTD vs. Schema

• Schema
• Newer created to address DTD shortcomings
• Allows definition of data types and formats
• Uses XML syntax
• Supports Namespaces

8
DTD vs. Schema

• Namespaces
• Allows you to mix data vocabularies from
  different sources, but avoid collisions of
  same-named elements

9
eSignatures

• Electronic signatures
• Buyer/seller signatures
• Common form signing pad at checkout
• Digital signatures
• Apply PKI digital certificate
• Can be used for the legal signatures required
  on an electronic contract, or
• Can be applied as tamper-evident seal to secure
  an electronic document

10
Security Components
11
PKI in 60 Seconds

• PKI Public Key Infrastructure
• Key Pairs Each Public Key has a corresponding
  Private Key
• Docs encrypted with one key can be decrypted by
  the other key (but NOT by the same key)
• Private key stays secret, public key is public!
• You send docs encrypted with your private key
• You receive docs encrypted with your public key
• Thus secure encryption without ever revealing
  your private key
• Complexity behind-the-scenes Certificate
  Authorities, Certificate Policies, Certificate
  Revocation Lists, etc

12
Technology Primer

• Legal Foundations

13
Three to Remember

• ESIGN Electronic Signatures In Global and
  National Commerce (Federal Law)
• UETA Uniform Electronic Transactions Act
• URPERA Uniform Real Property Electronic
  Recording Act

14
ESIGN

• A Federal Statute enacted by Congress Signed by
  President on June 30, 2000 (effective October 1,
  2000).
• An attempt to standardize State electronic
  contracting laws.

15
ESIGN

• A signature, contract, or other record may not
  be denied legal effect, validity, or
  enforceability solely because it is in electronic
  form.
• A contract may not be denied legal effect,
  validity, or enforceability solely because an
  electronic signature or electronic record was
  used in its formation.
• 15 U.S.C. 7001(a)

16
ESIGN Does Not Control

• Wills and trusts
• Family law matters
• Much of the Uniform Commercial Code
• Court orders/notices/court documents
• Other essential notices
• Utility shut off notices
• Insurance notices
• Product recalls
• 15 U.S.C. 7003

17
UETA Background

• The fragmentation in electronic commerce was
  evident.
• 1999-2005 NCCUSLs Uniform Electronic
  Transactions Act (UETA)
• 46 States DC USVI
• Have not passed GA, IL, NY, WA
• Many provisions parallel ESIGN

18
UETA Purpose

• SECTION 7. LEGAL RECOGNITION OF ELECTRONIC
  RECORDS, ELECTRONIC SIGNATURES, AND ELECTRONIC
  CONTRACTS.
• (a) A record or signature may not be denied legal
  effect or enforceability solely because it is in
  electronic form.
• (b) A contract may not be denied legal effect or
  enforceability solely because an electronic
  record was used in its formation.
• (c) If a law requires a record to be in writing,
  an electronic record satisfies the law.
• (d) If a law requires a signature, an electronic
  signature satisfies the law.

19
UETA Purpose

• SECTION 11. NOTARIZATION AND ACKNOWLEDGMENT.
• If a law requires a signature or record to be
  notarized, acknowledged, verified, or made under
  oath, the requirement is satisfied if the
  electronic signature of the person authorized to
  perform those acts, together with all other
  information required to be included by other
  applicable law, is attached to or logically
  associated with the signature or record.

20
Is THIS Enough?

• No. Having a federal law and a uniform law
  enacted in 46 states is not enough.
• Remember were concerned with land records, and
  nothing was said about land records in ESIGN or
  UETA
• ESIGN and UETA said nothing about eDeeds or
  eMortgages

21
URPERA

• Because of confusion around UETA and ESIGN,
  NCCUSL established the drafting committee for
  URPERA in 2002.
• The URPERA was drafted to remove any doubt about
  the authority of the recorder to receive and
  record documents and information in electronic
  form.

22
URPERA

• URPERAs fundamental principle is that
  requirements of state laws describing or
  requiring that documents be original, on paper,
  or in writing are satisfied by documents in
  electronic form.
• Requirements that documents contain signatures or
  acknowledgments are satisfied by electronic
  signatures or electronic acknowledgements.

23
URPERA

• URPERA is an overlay law to existing state
  recording statutes, so that each statute
  authorizing or directing recording does not have
  to be altered.
• URPERA also establishes a state commission or
  committee to develop and maintain e-recording
  standards based on national standards (PRIA).

24
URPERA

• URPERA is permissive, not mandatory
• URPERA specifically authorizes (but does NOT
  require) a recorder, at the recorders option, to
  accept electronic documents for recording and to
  index and store those documents.

25
URPERAEnacted in 12 Jurisdictions

• Arizona
• Arkansas
• Delaware
• District of Columbia
• Idaho
• Kansas

• New Mexico
• Nevada
• North Carolina
• Texas
• Virginia
• Wisconsin

26
Technology Primer

• Models of eRecording

27
Models of eRecording

• Model 1
• Scanned paper
• Model 2
• Scanned paper with XML data
• Model 3
• Fully electronic documents

28
Advantages for Counties

• Model 1
• reduces scanning
• Model 2
• reduces scanning
• can automate review
• can automate indexing
• Model 3
• reduces scanning
• can automate review
• can automate indexing

29
Advantages for Submitters

• Model 1
• minimal internal process change
• helps county speed overall process
• Model 2
• minimal internal process change
• automates recording process
• Model 3
• major enterprise changes provide significant
  automation analysis tools

30
Submission Options

• Single source point-to-point
• Vendor provides both submitter recorder
  software for preparing and recording eDocs
  respectively
• Agnostic recording receiver
• Recorder accepts from anyone who conforms to
  published standard
• Statewide portals 2 types
• Private-sector portals single point of entry to
  all counties supported by portal vendor
• Recorder-led initiatives single point of entry
  for all counties in a particular state
• Iowa, New Jersey, Missouri in production
• NC, PA, CO, CA are studying or planning

31
Document Models

• XHTML
• Data and rendered view
• MISMO SMART Docs
• Includes header, data section view
• 7 supported variations
• Adobe Intelligent PDF
• Combines PDF presentation with XML data

32
Recap

• XML
• Electronic Signatures
• UETA, eSIGN, URPERA
• Models of eRecording

33
Useful Links

• World-wide Web Consortium www.w3.org
• XHTML The Power of Two Languages
• http//www-106.ibm.com/developerworks/web/librar
  y/x-xhtml.html
• W3Schools Online Web Tutorials
  http//www.w3schools.com
• OASIS www.oasis-open.org , www.xml.org
• Microsoft XML www.microsoft.com/xml
• IBMs Alphaworks www.alphaworks.ibm.com/xml
• Sun and XML www.sun.com/xml
• The Object Management Group www.omg.org
• Object Oriented Programming and XML
  www.cetus-links.org
• MISMO www.mismo.org
• Great books on XML www.oreilly.com , www.xml.com

34
Technology Primer

• Mark Ladd Addison/One, LLC
• mark.ladd_at_addison-one.com
• Harry Gardner MBA/MISMO
• hgardner_at_mortgagebankers.org