MERS® eRegistry Frequently Asked Questions

Frequently Asked Questions

What is the MERS® eRegistry?

It is the authorized registry that identifies the current Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote. The Controller of an eNote can have the equivalent rights as that of a “Holder in Due Course” of a paper negotiable promissory note. The MERS® eRegistry is the mortgage industry’s “system of record” for holders of eNotes. A national eNote registry is part of the industry’s response to develop systems that can rely upon the Uniform Electronic Transactions Act (UETA) and the federal Electronic Signatures in Global and National Commerce Act (E-SIGN) to establish legal effectiveness of electronic notes for mortgage loans. The MERS® eRegistry is one of multiple functions utilized by Participants to satisfy the control requirement of Section 201(c) of the E-SIGN Act and Section 16(c) of the UETA with respect to a transferrable record (“eNote”). Its role is to be the authorized source to identify the party that has Control of the eNote and the Location (i.e., the party that maintains the Authoritative Copy of the eNote). Each Participant is responsible for determining that all the functions, including the MERS® eRegistry as set forth herein, utilized by the Participant and its service provider(s) constitute a system that satisfies the control requirements of Section 201(c) of the E-SIGN Act and Section 16(c) of the UETA. Under the terms and conditions of the GSE Uniform Electronic Promissory Note, all transfers of the eNote are required to be registered on the MERS® eRegistry.

Do buyers of eNotes require the use of the MERS® eRegistry?

Yes. GSE Uniform Electronic Promissory Note requires the use of the MERS® eRegistry for eNotes that they purchase. Furthermore, GSE buyers also require the use of MERS® eDelivery.

Does the MERS® eRegistry store eNotes?

No. Organizations that are in the business of providing eVaulting services can store eNotes on behalf of the Controller.

Since the MERS® eRegistry is the “system of record” for participants that control eNotes, does MERS® eRegistry handle the disbursement of closing funds?

No. Closing funds are disbursed as they would be with the closing of a paper note.

How did the MERS® eRegistry get started?

Key players from all sectors of the mortgage industry (lenders, servicers, investors and vendors) came together under the auspices of the Mortgage Bankers Association to develop requirements for a National eNote Registry, which were published in 2003. After that, MERSCORP Holdings developed and launched the MERS® eRegistry in 2004 based on these requirements.

The Mortgage Bankers Association sanctioned the creation of a single, national electronic note (eNote) registry system and key industry players have supported MERSCORP as the provider of the system.

Why eNotes? What is the benefit?

A promissory note in electronic form that complies with an investor’s requirements and registered with the MERS eRegistry is eligible for sale to any User that complies with investor’s requirements in the MERS® eRegistry. Due to the lower costs of handling and greater access to information, loans represented by eNotes can be more valuable to investors than the equivalent loans using paper notes. Lenders can reduce costs with eNotes by streamlining the post-closing and certification process, eliminating transportation costs and reducing costs associated with lost, destroyed and missing paper notes.

If I want to originate eNotes, what do I need to do?

There are two scenarios for originators of eNotes to interact with the MERS® eRegistry, one is direct, and the other is through a trading partner.

In the first scenario, you close loans with eNotes that contain the eNote clause and a Mortgage Identification Number (MIN), and register them on the MERS® eRegistry.

This requires you, or your vendor, to have:

  • system-to-system connectivity to the MERS® eRegistery
  • the ability to create the XML transactions required by the MERS® eRegistry
  • the ability to sign those transactions with a digital certificate.

In the second scenario, you close loans on eNotes that contain the eNote clause and a MIN, and immediately sell them to an investor who will do the registrations for you. This is called a Broker/Delegatee relationship. MERSCORP will set up your profile (as the Broker) on the MERS® eRegistry so that it allows another party (your Delegatee) to name you as the initial Controller and then do a transfer of control to itself.

Whichever scenario you choose, or role you play (lender, broker, investor) we will help you integrate and set up procedures and do any necessary transaction testing.

Does my current MERS Membership allow me to start this process?

Yes, but you must also sign the MERS® eRegistry Addendum. If you are not currently a MERS® System Member, you must sign the MERS Membership agreement and the Addendum.

What does MERS charge for using the MERS® eRegistry?

There is no additional membership fee for signing the Addendum if you are already a MERS® System Member. There are transaction fees. Please reference the MERS Pricing Schedule for current pricing.

Does MERS® eDelivery replace the need for an electronic document management system and an eVault?

No. MERS® eDelivery securely delivers documents in any electronic format (SmartDoc, PDF, TIFF, etc.). It does not validate or store electronic documents.

If I want to originate eNotes, what do I need to do?

There are two scenarios for originators of eNotes to interact with the MERS® eRegistry, one is direct, and the other is through a trading partner.

In the first scenario, you close loans with eNotes that contain the eNote clause and a Mortgage Identification Number (MIN), and register them on the MERS® eRegistry.

This requires you, or your vendor, to have:

  • connectivity with the MERS® eRegistery (via VPN)
  • the ability to create the XML transactions required by the MERS® eRegistry
  • the ability to sign those transactions with a digital certificate.

In the second scenario, you close loans on eNotes that contain the eNote clause and a MIN, and immediately sell them to an investor who will do the registrations for you. This is called a Broker/Delegatee relationship. MERSCORP will set up your profile (as the Broker) on the MERS® eRegistry so that it allows another party (your Delegatee) to name you as the initial Controller and then do a transfer of control to itself.

Whichever scenario you choose, or role you play (lender, broker, investor) we will help you integrate and set up procedures and do any necessary transaction testing.

Why eNotes? What is the benefit?

A promissory note in electronic form that complies with an investor’s requirements and registered with the MERS eRegistry is eligible for sale to any User that complies with investor’s requirements in the MERS® eRegistry. Due to the lower costs of handling and greater access to information, loans represented by eNotes can be more valuable to investors than the equivalent loans using paper notes. Lenders can reduce costs with eNotes by streamlining the post-closing and certification process, eliminating transportation costs and reducing costs associated with lost, destroyed and missing paper notes.