Despite working in a state known as an early adopter of new technology, SouthTech Systems, Santa Ana, Calif., is having difficulty selling an electronic deed filing solution it developed for the Orange County Clerk-Recorder's Office to other offices in the state.
SouthTech's solution allows title companies and other organizations to submit document images for recording to the Orange County Clerk-Recorder's Office over a secure Internet connection. The solution, which cost the county $750,000, also includes workflow and fee-calculation applications and a repository for storage and archiving.
Now SouthTech is hoping other counties in California will follow the lead, but there is a catch. The California Legislature, which approved the Orange County pilot project in 1997, has delayed further authorizations. The problem: District attorneys throughout the state are concerned that paperless transactions could promote fraud and hinder their ability to prosecute criminals.
Several county offices are raring to go, though. The solution provider has received visits from county clerks around the state, said Ron Rubino, SouthTech vice president of sales and marketing. In Orange County, the solution has cut the time it takes to record trust deeds and a slew of other documents from days to minutes, making realtors, lenders and home buyers a happier lot.
"It's wonderful," said Renee Ramirez, assistant Orange County clerk-recorder. "It's increased our efficiency by 18 percent."
Title companies, too, like the system. First American Title Insurance Co., Santa Ana, had to hire additional workers because the system pushed scanning, mailing and other tasks from the clerk's office to users, but that is a small price to pay for getting transactions processed more quickly. "I'd like to see it expanded nationwide," said Elizabeth Corbett, assistant vice president and operations manager for the global title insurance company.
Orange County began recording deeds electronically in 1997 with an earlier system, developed by Datatree, now a subsidiary of First American, which used a dedicated T1 line. SouthTech took over the application and rolled out a new solution in 2001 using a VPN, making the network more accessible. Now some 50,000 recordings are filed per month by 81 title and mortgage companies.
So why is Orange County still the only county in California, and one of the few nationwide, that processes deeds electronically? The debate involves issues such as who should have access and whether systems that completely replace paper images with data-only XML files should be used.
While SouthTech is ready with data-only solutions, the solution provider is also hoping pending legislation will enable counties to proceed with solutions such as the one used in Orange County, which preserves images and the original paper, automating only the filing process.
Rubino said security experts from integrator SAIC, the Los Angeles District Attorney's Office and the University of California at Davis assessed the system and gave it a clean bill of health. And the Orange County Clerk-Recorder's Office reports only two recent instances of fraud"both involving over-the-counter paper transactions. In fact, Ramirez said the electronic system is more secure than paper.
One unique security feature of SouthTech's solution is the use of a card that slips into a CD-ROM drive and allows a user with the right password working at a specific workstation to access a server, the address of which is encrypted on the card.
"The Cyberkard is a step above smart cards," Rubino said. "There's more capacity and more flexibility in what you can do with them."
The cards and related software, developed by CK Global, Irvine, Calif., also proved to be more reliable than a problematic fingerprint system SouthTech first deployed. SouthTech also uses hashing and encryption to ensure that images are not altered in transit. An SSL VPN guards entry to a server that is segregated from the rest of the county's network.
"It's been very complex to pull all this together, to do it in a way in which you're a pilot for California. You can't make any mistakes," Rubino said.
>> FOCUS: A solution for county clerk-recorders' offices
>> PROBLEM and SOLUTION: SouthTech developed a secure system for electronic filing of real estate documents for the Orange County Clerk-Recorder's Office.
>> PRODUCTS and SERVICES USED: CK Global Cyberkard, Fujitsu scanners, Microsoft 2000, Microsoft SQL
>> LESSONS LEARNED:
> Security concerns are a primary market inhibitor but can be a key source of opportunity if tackled.
> A security system based on card-access control is favored over a fingerprint ID system.
> Security and efficiency must be of the highest quality when the system is a pilot for others to come.