Real estate docs signed, sealed, delivered: virtually
May 3, 2004
Postal Service introduces Electronic Postmark
By Jessica Swesey
The U.S. Postal Service, whose services have been called "snail mail" ever since the Internet came along, generally doesn't ignite visions of high-tech innovation. But the Postal Service is trying to change its image in a big way with the Electronic Postmark, which creates a secure and legally binding time-stamped seal on documents that can be transferred electronically.
The real estate and mortgage sectors, in which hundreds of papers are signed and passed back and forth in a single transaction, present dozens of opportunities for the Electronic Postmark to be used.
The Postal Service uses technology developed by AuthentiDate, a provider of Web-based content authentication services, to enable businesses to sign and transfer electronic documents created in Microsoft Word. After a document is signed, the Electronic Postmark creates a security lock to ensure it isn't altered during transmittal or signing by another party.
"We see a lot of applicability in the real estate space," Richard Reichgut, AuthentiDate's VP of marketing, said.
Lenders could use Electronic Postmark to seal Web-based loan applications, he added. The technology also could be used to legally bind listing agreements made on the Web between consumers and real estate brokers.
The Postal Service never has access to document content and requires no modification or transmission of content to ensure user privacy. A hash code of the file is logged as evidence of authenticity.
Reichgut expects the technology to really take off at commercial real estate companies such as real estate investment trusts (REITs) that handle a lot of lease agreements and investment deals. He also envisions the electronic stamp being used at the residential closing table in the future to cut down on the number of documents, although he doesn't think a paperless closing will occur any time soon.
"Where we are with banks is we're discussing the beginning application phase…In terms of the entire closing, that is something we're still looking into," Reichgut said.
The add-on software can be downloaded free at the Postal Service's Web site, but so far is available only for Microsoft XP and Office 2003 systems. AuthentiDate expects to launch the service for Office 2000 in a few weeks.
Users purchase stamps from the Postal Service online at 10-80 cents each. The stamps function more like a notary service than like postage.
The Postal Service stores encrypted versions of the documents sealed with the Electronic Postmark. No one can read these versions becaue they exist only in a coded format, Reichgut explained. If someone manages to break into the document and change it, federal statutes for wire fraud would apply. The crime is akin to someone unlawfully opening someone else’s snail mail.
Geoffrey Elkin, who works in business development within the real estate vertical for AuthentiDate, said the company doesn't have any real estate clients yet, but has shown the technology to the National Association of Realtors and is discussing pilot programs with a local RE/MAX office in New York and commercial real estate company CB Richard Ellis. Neither NAR nor either of the companies has publicly endorsed the electronic stamp.
"It's a matter of getting people into pilot programs, then we'll see how it goes," Elkin said.
He thinks commercial real estate companies will pick up the technology once they use it in their lease agreements with businesses, then adoption will multiply more rapidly.
NAR doesn't plan to sign a deal with AuthentiDate for the technology, according to Mark Lesswing, VP of the association's Center for Realtor Technology. However, he said the Electronic Stamp is a good use of digital certificates to authenticate where a document originated and when it was stamped.
The Electronic Postmark is designed to comply with the federal ESIGN legislation signed in June 2000. That law made electronic signatures a legally viable option for conducting business. It also set requirements so that electronically signed records are stored in a way that accurately reflects the original information the documents contained and ensures the documents remains accessible to all parties who are legally entitled to access them.
Indiana this month became the first state to offer the Electronic Postmark service within its state court system. Authorized users can search Indiana's Bureau of Motor Vehicles database for a driver’s record, which can be attached to a digitally signed and sealed letter from the bureau's commissioner. The document then is electronically postmarked, delivered to the county prosecutor's office and can be used in court.
Copyright: Inman News Features