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The ambitious drive toward electronic filing of New Jersey mortgages and deeds is suffering setbacks, and a state official monitoring progress says it could be another year before e-filing begins. “We have several outstanding issues,” says Albin Wagner, the state’s chief of records management. Among them are delays in legislation to authorize e-filing and difficulties posed by the differences in the counties’ computer systems. On Oct. 16, the state Law Revision Commission confirmed the accuracy of Wagner’s statement by deferring action on a draft of the bill required to put e-filing into effect. Wagner says he hopes the legislation is ready in time for the state Legislature’s lame-duck session after the November elections. But John Cannel, the commission’s executive director, says sticking points remain, including agreement on how much to charge e-filers. In the state’s largest county, meanwhile, electronic filing is a dream deferred. The Essex County register, unable to cope with the 1,200 mortgage and deed filings that deluge the office daily, is fending off a suit by the New Jersey Land Title Association, which says the county is out of compliance with the two-day turnaround rule for filings. Right now, registering a mortgage in Essex County takes an unconscionable length of time, which endangers the orderly and fraud-free transfer of property, the title group complained in its suit. As recently as three months ago, clerks and registers around the state were upbeat about the advent of electronic filing, particularly in 11 counties taking part in a project to design a uniform cover sheet and set standards. They were planning for the day when frequent filers could fill out the forms on a template on clerks’ Web sites, press the send button, and have their deeds and mortgages filed and registered automatically. Clerks in those 11 counties are members of the Transaction Recording Information Technology System (TRITS), which is developing software and identifying systems that each clerk’s office can use. M. Claire French, the county clerk in Monmouth County, has taken an active role in TRITS and has invited other clerks and state officials to a demonstration scheduled for her office this week. Gloucester County appears to have nosed into the lead already, using the county’s existing network, developed by Affiliated Computer Services Inc. of Dallas, the same company that took over New Jersey’s troubled E-ZPass system earlier this year. County Clerk James Hogan says that on Oct. 14 his office completed a successful test of an electronic filing, accepting two mortgages transmitted from Homestead Realty, two blocks from the clerk’s office in Woodbury. Hogan says Homestead Realty was picked for the test because it has a record of accuracy in its filings, has a credit account with the office, and is close enough to the clerk’s office to allow hand carrying of the documents if the e-filing test was a bust. It wasn’t. Hogan watched a realty company employee press the button on the e-form, and seven minutes later in his own office he watched the filing come up on his computer. “It was seamless,” he says. Even so, Hogan is cautious about the rush to electronics and he calls his current efforts “putting a toe in the water.” He remains committed, at least during any startup phase of e-filing, to having computer images printed and bound into volumes. He says he worries there will be a fatigue factor for clerks who spend eight hours a day in front of computer screens. “I understand the need for standardization,” he says. “It’s a good thing.” But he, like many of the 21 elected county clerks and registers, is concerned about rules that would, in effect, allow the state to take over registration duties and reduce funding for clerk’s operations. Wagner’s agency, the state Division of Archives and Record Management, would be in charge of adopting regulations to establish format and technical requirements for recorded documents, under the latest bill draft being studied by the Law Revision Commission. The bill is a rewrite of Chapters 15 to 46 of Title 46, which was last overhauled in 1989 and lacks the language needed for e-filing. Cannel says the commissioners decided at the Oct. 16 meeting that the draft needed to be changed to make clear that even with e-filing, traditional filing methods would continue. He says more deliberation is also required on the fee structure. Current law requires payment of $30 for the first page of a mortgage or deed and $10 for each subsequent page. But thinking in terms of pages is old school in the computer age. With the help of clerks, technicians and the Land Title Association, the commission calculated the cost of an average document — $70 for a deed, $130 for a mortgage, $50 for a mortgage assignment, $45 for a mortgage discharge and $40 for a notice of lis pendens — and suggested that’s what filers be charged. Those numbers will require some tinkering. Cannel says the commissioners decided on Oct. 16 that a distinction between types of property might be necessary. A condominium master deed, for example, can go on for page after page under the current system, and it might not be a good idea to charge the same for that as for a deed on a single-family property. Once the legislation passes, much more needs to be done. Essex, Camden, Warren, Hudson and Morris counties are still using paper registration exclusively. And before any county can go online with an e-filing regime, the state would have to certify the computer system, Wagner says. He and an aide, Daniel Noonan, suggest that although the 11-county TRITS group has done excellent work, putting e-filing into effect would require participation by all counties in phases. If so, Essex County looks like a candidate for a later phase, as the register tries to keep the paper from getting out of control. Deputy County Register William Narvaez acknowledged in an interview on Oct. 15 that filing times are lagging despite shifts working six days a week. “Some days we aren’t successful,” Narvaez says of the staff’s effort to keep from falling even further behind. He says the county is committed to correcting the problem and is working on a plan to present next month to Superior Court Judge Neil Shuster, who is presiding over the Land Title Association litigation. Bergen County was included in the suit when it was filed in August, but after County Clerk Kathleen Donovan demonstrated that filing delays there weren’t so terrible, the complaint was amended to name Essex County only, says the title group’s executive director and counsel, Edward Eastman Jr. of Lomurro, Davison, Eastman & Munoz in Freehold. Under the law, and a 1999 consent order between seven counties and the title group, real estate documents are supposed to be registered within a day of receipt. Without timely filing, a real estate purchaser’s title search could miss a previous unrecorded sale. In the worst case, a purchaser could end up buying a home that had already been sold. Given the register’s office acknowledgment that the delays exist, the suit provides a framework for the county to come up with a remedial plan that satisfies Judge Shuster. The suit also asks Shuster to compel the Essex County freeholders to give the county register the money needed to fix the problem. Defense lawyer Thomas Bachman, an assistant county counsel, did not return telephone calls over the past two weeks. Narvaez says that while the freeholders are committed to making improvements, he would withhold comment until a plan is ready.

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