Florida eRecording: Tools to Adapt to the Ongoing Waves of Change

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Caitlin: Hello, everyone, and welcome to today's webinar, "Florida eRecording: Tools to Adapt to the Ongoing Waves of Change." My name is Caitlin Alaburda, and I will be your moderator.

Joining us today is Sarah Savery and Andrew Singleton. Sarah is a CSC electronic recording national account manager for CSC in Wilmington, Delaware. In her role, she onboards submitters to our eRecording digital tools and assists in new client acquisition. Since joining the eRecording team in 2018, Sarah works with the leading title underwriters, real estate firms, and leading institutions throughout the country. She provides first-class training and customer service as well as live demonstrations. Andrew is the national account manager and corporate consultant for CSC based out of the Wilmington, Delaware headquarters. He joined the team in 2015, and his role includes onboarding submitters to CSC's eRecording digital tools and new client acquisition.

And with that, let's welcome Sarah and Andrew.

Andrew: Thank you, Caitlin, and thank you to everyone joining us today to take a look at this eRecording webinar. Sarah and I are really excited to go over some information regarding the uniqueness of the Florida market and certainly our eRecording platforms.

Before I get started into that, I just wanted to give you a quick overview of who CSC is. We've been in business since 1899. We currently support more than 10,000 law firms, including some of the most prominent throughout the country. In total, we serve over 180,000 corporate customers throughout the country. And additionally, we protect more than 65% of the 100 Best Global Brands, including 7 of the top 10. We provide solutions to 3,000 financial market customers. Although we're headquartered in Delaware, we have locations worldwide, and additionally we serve 90 of the Fortune 500.

To expand upon that, on the screen now you'll see among other things that CSC offers with regards to real estate, we also offer a host of other different services. You'll see here we offer registered agent services. We assist many with their corporate filings and documents, from entity management and compliance to global financial markets, matter and deal management, DBS or digital brand services, and then, of course, our real estate recording and searching services. And for those of you in the audience, we also provide UCC searches and filings, and many of our financial institutions that take advantage of our eRecording services also use CSC exclusively for their UCC searches and filings.

And at this point, I'm going to go ahead and turn it over to Sarah for the next slide.

Sarah: Thank you, Andy, for that introduction to CSC of course, and also thanks to our wonderful moderator and to all of those in attendance today.

Diving into Florida market conditions, so much of what we're seeing in Florida obviously we are also seeing on a national level, but there are some unique things to the Florida market that we're going to connect on today as well. Starting from the top here, median prices are up and supply is tight. It is no secret that home values are up, and the availability of those homes are in short supply.

A Florida single-family median home price increase set a 12-month record high in April at $410,000. That's a year-over-year increase of 22%. Fewer closed sales compared to a year ago. We are down negative by 15%. That's the largest decline since June of 2021, obviously again driven a little bit by a lack of available homes as well as rising interest rates.

According to ATTOM, Florida ranked number two in foreclosures in Q1. Double-digit month-over-month foreclosure rates are expected for at least the next six months. And with that, Florida is ranking just behind California in foreclosures. We have seen nationally, that after the moratorium was lifted on foreclosures, that the volume of foreclosures did increase.

What else are you kind of seeing with that, Andy?

Andrew: Yeah. I mean, I think it's important to note, from an eRecording standpoint and from a document recording standpoint, that it's not exclusive to just the purchase of a home and getting the deed of trust or mortgage and the deed on record at that point. But eRecording can come into play for the entire cycle, if you will, from loan modifications to refinances, to HELOCs, foreclosures, and other related transactions. Those are all pretty much documents and transactions where eRecording can certainly provide a benefit to each and every one of you.

Sarah: Absolutely right and certainly this is not just attorneys you're talking about. You're also talking about your mortgage servicers that would have a hand in recording those documents as well. Fantastic point there, Andy.

Additionally, we are looking at an increased rental burden that puts affordable homes in high demand. Luxury homes certainly took the spotlight in 2021 as the shift to remote work became obviously more accessible to more people and more industries. Many did relocate to some of Florida's most desirable areas. In 2022, buyer demand for luxury homes we expect will level off and will shift to more affordable homes.

Since 2019, average rent prices in the United States have risen by 24%. That rate is completely outpaced when you look at Florida's four largest metros. So we've got Jacksonville at 32%, Orlando 34%, Tampa 53%, and Miami at a whopping 61% rental increase year-after-year. And I think it's primarily Broward and Palm Beach County that seems to be really driving those rental markets, wouldn't you say, Andy?

Andrew: Definitely and the numbers bear it out. Southern Florida, which typically consists of Broward, Palm Beach, and Miami-Dade Counties has seen a 57% increase in rent year-over-year. Just astonishing and it certainly outpaces the rest of the metro areas throughout Florida and quite frankly throughout the country for that matter.

Sarah: Absolutely right. And it's worth noting Florida does not have any sort of rent control ordinance. So I guess the cap, if you will, of what a landlord can charge for any rental properties there is really just the cap of what any potential renter would be willing to pay for that house. So probably no end in sight as far as those soaring rental prices.

Andrew: Absolutely. Yeah, it's very simple supply and demand. When the demand is high and the supply is low, what goes up, right? The prices. People are willing to spend it, and the renters are willing to push the envelope and go as high as they can.

Sarah: Absolutely. Okay. Let's dive into some market forces there in Florida.

So interest rates and supply. Mortgage rates plunged early in the pandemic. We all saw it. I was one of the very few people that refinanced my home in those early days if you can relate to that. But obviously, in the new year here, it has been characterized by some rising rates. And as we kind of discussed on the previous slide there, because of the unique situation with the rental prices there, even despite the rising interest rates that we are seeing, it does seem that Florida is uniquely still positioned as an attractive purchase market there.

Rates at the beginning of June were at 5.38%, which is in line with the predicted 2022 average of between 4.8% and 5.5%. Inventory and active listings remain tightly constrained through April of 2022. Single-family existing homes were at a one-month supply, condo inventory at a 1.3 months supply.

And kind of seeing what we're pulling at this point, Andy, I mean this is sort of something that is subject to daily change if not weekly change. I think we can safely assume that rates might even rise over earlier predictions. What's your call on that?

Andrew: Yeah, I would definitely . . . I think from everything that we've read and everything that we've seen, I think their predictions were a little low, and we're starting to see evidence of that, where the interest rates in all likelihood will probably be higher than what was initially predicted. And recently I read an article about the central bank that was discussing or were in discussions on upping the interest rate to nearly three-quarters of a percent, which is absolutely unheard of. So yeah, I think it's safe to assume that the rates are going to be, in all likelihood, higher than initially predicted.

I just want to expound upon something here. On the national level, the year-over-year in March, year-every-year on a national level, the prices of new homes increased from . . . It was a 20.9% increase. What's interesting is that in Florida, the year-over-year of March, the increase was 31.4%, which is nearly 50% higher than the national rate.

What that paints the picture of is despite the rates increasing and the inventory being low, Florida is still the hottest market. People are still going to Florida. People are still buying homes, and people are still doing what they need to do to secure residence in Florida. And it's just astronomical, and it's almost as if Florida is immune, if you will, to some of the things that are happening throughout the country with regards to interest rates and inflation and things like that in the real estate industry.

Sarah: Wow. Well, Andy, you better not be secretly contemplating a move to Florida and not tell me, so.

Andrew: That's always on the table for me.

Sarah: The smaller markets will benefit from remote work. As the popularity of remote work continues to grow, more people are expected to move from major cities to find a slower-paced, more affordable lifestyle. Smaller markets, like the Panhandle, Lakeland, Fort Myers, and Melbourne, are generally more affordable compared to some of the larger Florida metros that we had discussed previously.

New home construction growth, supply chain concerns aside, despite national supply chain issues, construction companies are employing very innovative strategies to stay ahead, including vertical integration with other suppliers in the process to eliminate potential supply chain gaps. Permits for multi-family and single-family construction in central Florida are expected to increase by more than 4,000 over 2021 and 10,000 above 2019. 2023 forecasts are projected to hit plus 38,000, besting a record set previously in 2005.

And Andy, I think we can attest over here, based on the number of NOC documents that our construction clients have been filing, these projections seem to hold some water.

Andrew: Absolutely. Yeah, there's been evidence that there's no slowdown in new construction in Florida. If there's land available, houses are being built on it, and property is being used for commercial or residential for things to be built on it. So there's certainly no . . . and that is bucking the trend, if you will, from on a national scale where things have slowed down a little bit on the building of new homes and new construction on the national scale. In Florida, they're keeping pace. They haven't lost a step. And despite, like you said, the national supply chain issues and things like that, they're still finding ways around getting these houses built and ultimately on the market.

Sarah: Absolutely. Floridians are certainly very ingenious at kind of getting around some of these national market conditions. So fantastic to see in that market.

With that, I'm just going to switch gears here a little bit and pass it over to you, Andy, to talk a little bit about the market growth that we're seeing.

Andrew: Thank you, Sarah. Here I'm going to talk about market growth and specifically as it relates to Florida and eRecording in the state of Florida.

We've seen the demand for eRecording surge throughout the country over the last 18 to 24 months certainly. Transactions are driving the volume up certainly, but also the need to eRecord is driving volume up.

National scale, our sales were in the year-over-year from 2019 to 2020 and 20202 to 2021, we're in excess of 10%. And Florida was a bit unique, where it stayed flat in the 4% to 5% range. And as I looked at the numbers and I asked myself why, it's because Florida was at the forefront of eRecording. A lot of the title agents and the banks and the law firms set up for eRecording a long time ago. So a large base of our clients had already been eRecording and were already taking advantage of the eRecording mechanisms that are in place throughout the state.

You'll see over to the right where we have an image of the state. Our coverage encompasses 98.5% of the population in the state of Florida. And you'll see here that our submitters recorded more than 10 million documents throughout Florida in 2021, 73% of which was eRecordable, which is the highest percentage per population across the country. So out of 10 million documents, 7.3 million documents were recorded in the state of Florida in 2021.

Yeah. Any thoughts on that, Sarah?

Sarah: No. I mean, I think you said it all, Andy. I mean, eRecording in Florida has been around for so long. Obviously, you and I were talking before just out of curiosity which county was the first to eRecord in Florida. We found out Broward has been eRecording since March of 2000. I mean, take yourself back 22 years here of eRecording in the state of Florida.

So it's just a really rich market. It's a very mature market. I think, like you said, the lenders, the servicers, the attorneys, the title companies, they've long known and understood the benefit of eRecording. So we did not necessarily see that surge during the pandemic because so many of those industries, of course, already had the benefit of eRecording within their operations.

Maybe just one of those exceptions to that was the way that the pandemic and the shutdown at the courthouses drove contractors and builders into the eRecording arena. I remember in the early days of the shutdowns, I'm sure I can bring you back there as well, Andy, fielding all of those frantic calls from the builders, the contractors. "I can't get my document recorded. The county office is closed. What can I do?" And kind of bringing this sort of new industry right into the foray of eRecording and walking them through that process.

And I think what's really amazing is that even now, as things have opened up, that still is a really significant portion of our new clients are these builders and contractors. So no, I mean absolutely, at this point, when you've got title, you've got lenders, you've got attorneys, you've got builders and contractors all enjoying the benefits of eRecording, the security of eRecording, certainly if in your business you are not operating in a similar fashion, why aren't you?

Andrew: Yeah, absolutely. March of 200 makes you wonder if they weren't waiting to get through Y2K before they transitioned to eRecording, right?

Sarah: And you know what they were listening to on the radio. Apparently Destiny's Child "Say My Name" was number one. So that's how long ago we're talking guys.

Andrew: Yeah. I wanted to touch base real quick. You mentioned at the onset of the pandemic and a lot of the builders and others that were reaching out to us. In most of those cases, we were able to get them set up and ready to go and get their documents submitted that same day.

So with everything that was going on, I remember a lot of those builders and a lot of those contractors, we were able to get them set up and running the same day, something that we were obviously very proud of. But given the situation at the time, to have such a large volume of new submitters reach out to us and to get them up and running, get their document in many cases recorded the same day or the next day, and then to see their minds put at ease to know that we were there for them certainly makes us feel better about what we're doing with everybody.

Okay, moving on to the next slide. In addition to eRecording, we also have a team based out of Tallahassee, Florida, that provides full-service recording, so paper recording, primarily for those jurisdictions who do not accept eRecording. There's approximately 3,600 counties throughout the country, of which roughly 2,100 or 2,220 accept eRecording. So our eRecording counties and jurisdictions encompass about 87% of the U.S. population. But having said that, we have a team in Tallahassee that can also perform paper recording for our submitters.

And the nice thing with that, with our eRecording and our paper services is it's through one application, through our ePrepare system. So those that are paper recording can go into our ePrepare system, check on statuses of documents that Tallahassee are performing for them and recording, processing for them.

From a billing aspect, it's all consolidated. From a billing and accounting aspect, everything is consolidated into one mechanism. You can check on statuses there again within one system.

And the nice thing, one of the benefits, if you will, of our paper team is it can either be for those that have ongoing needs, or it can also be for those that have projects and project-based. I know I've worked exclusively with a number of lenders and banks over the past 18 months whom were backlogged. They had so many releases that had to be recorded, and they just found themselves with months and months of a backlog of releases. And the nice thing with our Tallahassee team is they were able to process all of that. So literally send documents to our team in Tallahassee and we'll take care of it from there for you.

Sarah: All right, awesome stuff, Andy, and a nice little shout-out to our Tallahassee team there.

Moving on, going to dive a little bit into notice of commencement and recording these NOC documents. As we already talked about, new construction projects are up. It's kind of a driving force of what's going on there in the real estate market in Florida. And, of course, our builders and contractors have been busy filing these NOC documents through the system.

For those of you who are not familiar, a notice of commencement form is completed, recorded, and notarized by the owner of the property. Currently there are 11 states that have legal notice of commencement procedures and filing. The property owner or the owner's agent is required to post the notice of commencement on the jobsite before the project begins.

Some additional Florida requirements to add into that. All private jobs valued over $2,500. NOC deadline there is going to be before the start of the job. Property owner is obligated to ensure an NOC is properly prepared and recorded. And for construction loans in Florida, the obligation would rest with the construction lender.

Okay. Enjoy the benefits of digital with eRecording. Obviously, we've already talked at length about Florida long knowing the benefits of eRecording, how it assists in all levels of operation. But for any of you who are not familiar, who are tuning in today, we offer through the process of eRecording convenience, speed, transparency, and communication.

With this process, you can retain control of all internal processes. You're not outsourcing anything. A financially rock-solid company that you would be partnering with. CSC, at our core, we've got a long history of working with government entities, which certainly help and go a long way as we partner with these counties that accept electronic recording.

When you are submitting those documents, they are submitted in seconds, not hours or days. Documents returned electronically same day, not weeks when you are having to manually file those documents with the county. And, of course, the benefit of immediate notification of any rejections and an ability to correct and resubmit. Obviously, the goal would be, at that point, to record documents same day. And I would venture . . . I mean we had a little bit of when Miami-Dade, for example, was kind of backed up with some documents and maybe it was taking a little bit longer to process, for the most part, Andy, wouldn't you agree most of the Florida counties are typically same-day recording?

Andrew: For the most part. Miami-Dade is by far the longest turnaround time within the state. But a large majority of them are within the same day turnaround times.

And I'd also, at this point here Sarah as well, from one of the benefits is the billing aspect of it, right? So with eRecording, you're no longer writing or with recording you're no longer writing checks. And if you're mailing documents, you're no longer mailing your document with a check and hope that the document is correct and that the check amount is correct.

With eRecordings, CSC is advancing whatever the county recording fees and taxes are for your documents being submitted. And once recorded, CSC there again is paying the county that total amount and reconciling with you, the submitter the next business day. So there's again no more check writing, no more getting a rejection because your check was a dollar off or things like that. We've simplified the billing aspect of it altogether, and it has really made things a lot easier for our submitters.

Sarah: Absolutely. And also worth adding there, as far as the billing and reconciliation process, nothing is billed or invoiced until the document successfully records, which is great as well. CSC does not charge any sort of rejection fee. So we would only reconcile and bill after that document has successfully recorded with the county.

So obviously when partnering with a vendor for eRecording, it's very important to understand the measures that CSC takes when protecting your information, your documents, keeping everything secure. So some but not all of course of some of the security measures that CSC offers is data encryption, a very detailed disaster recovery plan, which we kind of went out in the forefront during the height of the pandemic to our existing clients and just kind of shared that proactively to give them the peace of mind when we were sort of going through these uncharted waters and territories collectively. Secure data storage facility and we are SOC 2 audited, secure, compliant, and web-based.

Andrew: All right. Thank you, Sarah. So CSC, we sponsor a lot of events on the national scale. We attend many of the conferences, both on the land title side and also with the mortgage banking side.

This month we've attended and sponsored the NS3 conference, the Fund Assembly, which occurred there in Orlando, and I believe Sarah attended that one. And then I just got back from the MBA Florida conference, again in Orlando, just last week. So we make every effort to attend and not only attend but sponsor and promote the real estate industry throughout the state of Florida and on a national scale as well.

Sarah, any take on your trip to Orlando?

Sarah: Well, so my event was at the, goodness, Rosen Shingle Creek Resort Conference Center there, and I'm going to tell you I need a break just because that place is so massive. My feet, I definitely got a workout just kind of trucking it from the different areas over there. But no, fantastic to be able to meet and connect with so many attorneys in Florida, and really looking forward to any future opportunities we have in the state.

Andrew: Yes, totally. Thanks, Sarah.

Okay. Why customers trust CSC more than ever before. So we have automated, efficient, and secure solutions. We've rolled out a number of things over the past 18 months or so.

The first one being custom email notifications, where you have the ability to do just that. You can customize emails through our ePrepare system. So you can send the recorded image in a custom email to the recipients.

We also have a certain level of AI or artificial intelligence, where we have document recognition via machine learning technology. We have enhanced integrations with title and mortgage production platforms.

And here's seven new services and tools that we've developed since 2020. We've come out with a Property Search tool, Property Search feature within ePrepare. For those of you that are preparing assignments and releases and satisfactions of deeds, trusts, and mortgages, we have templates, both on the commercial and residential side, where you can prepare those documents 100% digitally through our platform, render the document through our platform. And for those that are doing that, we have a Signer Manager tool within ePrepare.

We have eTrustee services for those of you that might be preparing documents and deeds of trust on the West Coast. We have Deed of Trust Lookup specifically for Colorado.

There again custom email notifications. And then, for those of you that are recording satisfactions, discharges, releases, reconveyances, no matter what they're called, we have a Borrower Notification Letter process within ePrepare that, just as it sounds, it informs your borrowers when their loans have been satisfied and paid off. So if you have a statewide requirement or internally you have a requirement to inform your borrowers that their loans have been satisfied, just know that we have a service for that capability.