Weary real estate investors cheer new sense of certainty
Dale Atkins, clerk of Orleans Parish Civil District Court, inked a deal Tuesday night with a data management firm that promises to restore 60,000 missing conveyance records and 119,000 lost mortgage records by Jan. 2.
Joseph Dillard, left, and Tony Pierre picket in front of New Orleans City Hall on Monday to call attention to how the loss of 20 months of real estate records is hurting their business rehabbing and selling homes in eastern New Orleans and the 9th Ward.The news provides much-needed certainty to a local real estate industry that has been thrown into disarray ever since computer databases containing the records crashed in October.
Without full conveyance and mortgage records restored, title companies can't be sure of the true ownership of properties and are reluctant to underwrite deals.
Joseph Dillard, a local builder whose whole livelihood is tied to purchasing, fixing and selling storm-damaged homes, was picketing City Hall on Monday and said he was relieved by Atkins' announcement Tuesday.
"It was like driving out of town and you don't know where the next gas station is, and that's scary," said Dillard, who has three sales of homes he had renovated tied up by the crash and said he needs the money from those deals to complete the purchase of a fourth property. "At least now we have a date and now I can line up my contracts again."
Atkins already had a deal with the Windward Group to re-input the lost conveyance records. She had been considering several separate deals for a company to restore the mortgage records. She settled on having the same company, the Windward Group, do both tasks because the contractor said it would be able to complete both by Jan. 2.
The mortgage records are more involved, more numerous and cost more to input -- $1.38 per mortgage document vs. 78 cents per conveyance instrument. That means the Windward Group is in line to make about $50,000 for the conveyance records and nearly $165,000 for the mortgage records, plus a $1,500 setup fee for each project.
Atkins said she will have 90 in-house employees verify the data inputted by the contractor before making the database available to the public again.
Two court-run servers containing hundreds of thousands of real estate records crashed six weeks ago. It took until Nov. 19 to get the system back up and running, but the hard drives were still missing all conveyance data entered since March 2009 and all mortgage data since August 2009.
The documents that were lost still exist in the clerk's offices in paper form, but the only way to find their location in books is by using a computerized index, which was also lost in the crash.
The staff, including employees on loan from surrounding parish clerks, have finished inputting records received since Oct. 26, Atkins said. A backlog of new real estate records was created because the system was totally offline for more than three weeks. Atkins said she's continuing to add staff to work overtime on the project.
Atkins is the custodian of the records, but she relies on the court's computers and IT department to maintain and backup the data.
A California company hired by the court to backup the data stopped collecting new data to backup in July, apparently because of a problem with a software update, Judge Piper Griffin said. Meanwhile, under the terms of its contract, the firm, i365, purged the data it had received before July, said Griffin, the chair of the court's technology committee. It's unclear whether the company or the court's IT department was at fault for the lack of data transfers after July.
The company has declined to comment on the incident.
The court has already hired a new chief information officer, Peter Haas, to lead the department and oversee the long-time chief technology officer, Tynia Landry, who was in charge of a two-person IT staff during the crash.
The court's judges met Tuesday in a closed-door "en banc" session and received an update from Atkins. Griffin said the judges decided to launch a formal investigation into what caused the servers to crash and the loss of remote backup data.
Both Atkins and Griffin said the meeting Tuesday went well, with the judges pledging to help Atkins with some of the costs of recovering the data. Previously, it appeared the court would only pay for fixing the servers and the recovery costs would fall entirely to the clerk's office. Both entities are financed by public use fees, such as filing fees, court fees and recording fees.
Atkins and Griffin said the amount the court will provide will depend on the final costs of restoring the databases.