Does MERS change the current mortgage closing process?
Yes, it makes it better! Your organization follows its normal and customary procedures, except that you'll save $30 or more per loan when you specify MERS as the Original Mortgagee (MOM) of Record in the mortgage or deed of trust. MERS becomes Nominee for you as the lender and the lender is also identified on the document, using Fannie Mae and Freddie Mac approved language. You need to generate a Mortgage Identification Number (MIN), and include it on the closing documents, and complete the registration of the loan on MERS. Your closing process is even easier if the old mortgage on the property was registered on MERS, because the lien release process is not delayed because of missing or incorrect prior assignments. Chain of title starts and stops with MERS!
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Is MERS intended for new loans only?
No. Registering your entire portfolio may help you streamline your operation by eliminating the need to run dual tracking of mortgages registered, and those not registered, with MERS. Then, if you decide to sell the mortgage rights, you save the time required to register with MERS and prepare an assignment to MERS for a portion of the sale portfolio - speeding the transfer process. In addition, the value of the servicing asset may be enhanced.
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Is MERS intended for registration of first liens only?
No. Multiple lien positions are supported.
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Does the MIN require us to replace our current loan number system?
No. While the MIN is a unique life of the loan identifier, your organization is under no obligation to abandon use of its loan number system. In fact, you can use your existing loan number wrapped by your unique MERS organizational ID and a check digit to generate the MIN. You need to enhance your servicing system to carry the MIN, which is a unique 18 digit identifier. The MIN becomes the vehicle for communicating information with other members of the real estate finance industry without having to resort to elaborate cross-referencing schemes for different loan numbering systems. And since you can assign a MIN for a loan when application is first made by the consumer, you may find that your numbering system is no longer needed.
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Is MERS legal in all 50 states?
Yes. MERS has been designed to operate within the existing legal framework of all 50 states.
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Are service bureaus and software vendors modifying their systems to accommodate use of the MIN?
MERS and EDS have been providing service bureaus and software vendors with detailed information about MERS operations and specifications that they need to enhance their systems. Please contact your vendors and tell them they need to become MERS ready for your business.
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How can I become a MERS member?
It's easy! Call 800-646-MERS (6377) today and ask for the Customer Division. Membership is open to the real estate finance industry.
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How much does it cost to be a MERS Member?
Members are assessed annual membership fees based on the size of their organizations and the type of MERS access they require. Memberships begin at $264.
Modest transaction fees are also assessed for mortgage registration and transfers of mortgage servicing rights. See the MERS Fee Schedule page for more specific information. Fees are modest relative to the cost savings that MERS projects-meaning that your net savings using MERS is considerable.
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What Agreements does my organization have to sign to become a MERS Member? What is our obligation?
Your organization signs a standard binding Application which sets out the relative rights and responsibilities of all MERS Members. The Application refers to the MERS Rules and Regulations which control the operation of the MERS® System. The Rules and Regulations can be changed from time to time by the MERS Board to address specific needs of the System.
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If I don't sell servicing, why should I join MERS?
Predicting the future in the mortgage industry has proven risky. It is therefore wise to inoculate your portfolio with MOM loans now. Registering your servicing now gives you the flexibility to react quickly to future market changes.
MERS also reduces paperwork as a result of the other assignments needed in other parts of the industry. With MERS as the Mortgagee of Record, you don't need additional assignments-ever. The unrecorded assignments needed for interim fundings and loan sales are costly. With MERS you save an estimated $3 per loan on unrecorded assignments.
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Do my correspondent lenders have to become members of MERS?
It is not required, but it would be to their advantage. Capital lenders are urging their correspondents to become members because they prefer the paperless transmission and elimination of assignments, not to mention the savings of about $22 per loan that correspondents realize by being on MERS. But you can instruct correspondents to name MERS as the mortgagee of record on the original assignment, without being a member of MERS.
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What is the value of a MERS-registered servicing portfolio versus one that is not?
A large national broker of servicing has estimated the MERS premium to be approximately $25 to $50 per loan.
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Does MERS save the lender time?
MERS saves time associated with processing multiple assignments. MERS also streamlines the lien release process since MERS is virtually guaranteed to be the end of the chain of title. This corresponds to reduced research time and fewer re-recording fees.
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For lenders who originate for their own portfolio - how does MERS provide benefit?
The same benefits occur as previously mentioned, eliminating the cost of multiple assignments and reducing costs associated with lien release, to name two key benefits.
What value do title companies derive from MERS?
For loans registered on MERS, title companies have a single, electronic source of identifying the current servicer of a loan to obtain payoff quotes and verify that payoff funds have been received, simplifying the entire titlework process.
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Does MERS replace the role of the trustee in Deed of Trust states?
No. Servicers perform substitution of trustee and satisfactions just as they do without MERS except that they prepare these documents via a Corporate Resolution from MERS since MERS is the Mortgagee of Record.
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Have the nationally recognized rating agencies approved MERS?
Yes. All of the major rating agencies (Standard and Poor's, Moody's and Fitch) have approved MERS registered loans for inclusion in a rated security.
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