There is no shortage of laws and requirements surrounding real estate transactions. The challenge for many firms that handle these deals is adhering to the complex array of rules and regulations.
Brady & Kosofsky (B&K), a law firm based in Matthews, N.C., is no exception. “In the Carolinas, an attorney is required by law to supervise and be part of the closing of the loan, unlike other states where a notary can go and close the document,” explains Warren Hampton, chief innovation offer for the firm.
A persistent challenge is ensuring that transactions meet strict legal requirements while, at the same time, the firm and other parties protect private information, including loan numbers, Social Security numbers and the terms of the loan. “In the digital age, a lot of data must be encrypted,” Hampton says.
What’s more, federal and state requirements mandate that beginning in October 2015, law firms and real estate firms that oversee deals must adhere to a strict set of requirements that address how documents are stored and exchanged.
Deploying a Secure, Reliable System
B&K took a proactive approach and adopted a technology solution designed to streamline the process. In June 2014, it turned to a solution from cloud-based storage security vendor CertainSafe to provide proprietary “MicroTokenization” technology, which automatically encrypts files sent through email.
“We have a highly secure and reliable system in place to manage documents through email and other solutions that share files and data,” Hampton explains. “The CertainSafe system allows us to use specific business rules to ensure that employees and others follow policies.”
For B&K, this means ensuring that any attachments sent through email are automatically encrypted, and any documents that contain a Social Security number or loan number are also encrypted, he says. In addition, the software adds a keyword to the subject line of the message, and that keyword forces the return message to be encrypted.
All encrypted messages require a password, and all users must be pre-verified in the system. In addition, any domain that does not match a verified user is rejected. “The encryption is used throughout the service with all communications,” Hampton reports.
The encrypted files reside in the cloud in a hosted environment. “As long as both parties are approved, the transaction can take place,” he says. “It is a highly secure environment, and it reduces our potential liability.”
The biggest challenge hasn’t been installing the solution: It’s been getting real estate offices to adopt it. “Some of them have dragged their feet and resisted the regulations, which have already been delayed once,” Hampton explains. “We’ve attempted to educate [the real estate offices], assist them and work with them to install the solution, including the necessary APIs.”
In a few cases, the firm had to drop clients that resisted the changes and made no attempt to adopt the encryption technology.
“The data is now in a far more secure environment,” Hampton concludes. “Electronic transactions and communications are protected in a way that wasn’t possible in the past.”
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