Mortgage Electronic Registration System — MERS

What Is a Mortgage Electronic Registration System — MERS?

The Mortgage Electronic Registration System (MERS) is a database made by the mortgage banking industry. A confidential electronic library of mortgages originated in the United States, it monitors transfers of and changes to servicing rights and ownership of the loans. It is utilized by the real estate finance industry for residential and commercial mortgage loan recording trading.

MERS, which additionally alludes to the privately held company that deals with the database, is approved by such government-sponsored endeavors as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Government National Mortgage Association (Ginnie Mae), along wth such government agencies as the Federal Housing Administration (FHA) and the Department of Veterans Administration (VA) that are engaged with housing loans. The California and Utah Housing Finance Agencies and all major Wall Street rating agencies utilize it also.

Grasping the Mortgage Electronic Registration System — MERS

Each time a mortgage is sold starting with one bank then onto the next, an assignment — a document showing that the mortgage has been transferred — is, hypothetically, prepared and recorded in the region land records. The assignment transfers all of the interest the original lender had under the mortgage to the new bank.

By tracking loan transfers electronically, MERS takes out the well established practice that the lender must record an assignment with the area recorder each time the loan is sold starting with one bank then onto the next.

The MERS system is utilized by mortgage originators, servicers, warehouse lenders, wholesale lenders, retail lenders, document overseers, settlement agents, title companies, insurers, investors, province recorders, and consumers. Province and regulatory authorities and homeowners can access MERS free of charge. Homeowners can look into information on their own mortgages that are registered with the system.

To utilize the electronic tracking, the servicer of the mortgage assigns it with a mortgage identification number (MIN) and afterward registers the loan with the MERS database. Sometimes, MERS itself is designated as the mortgagee, as the original lender is formally called in the mortgage documents; such a loan is known as an original mortgagee (MOM) loan. From that point, the seller can begin the mortgage with MERS as a nominee of the lender (likewise alluded to as the beneficiary), and afterward assign or record the assignment of the loan to MERS in the region land record. This would make MERS the mortgagee of record.

While MERS can act as mortgagee in district land records, it doesn't actually possess the mortgage loan.

In the event that the lender sells the loan, MERS will refresh its information in regards to the mortgage. The servicer of a mortgage can have it eliminated from the MERS database by sending a request to have it deactivated. MERS will, thus, advise Fannie Mae. On the off chance that the servicer of a mortgage needs to end their participation with MERS completely, it must likewise inform Fannie Mae quickly.

Advantages and disadvantages of the Mortgage Electronic Registration System — MERS

As an electronic, one-stop site for mortgage documents — deeds of trust and promissory notes — MERS enormously works on the mortgage cycle. MERS can act as an expense saving measure somewhat on the grounds that, by acting as a mortgagee, it cuts the expense of recording the transfer of a

mortgage starting with one lender then onto the next. Having the loan in MERS' name (as nominee) in the land records saves time and recording costs on the grounds that various assignments aren't required each time the loan changes hands.

However, the database has drawn some analysis. During the 2008 housing crisis, the system made it troublesome now and again to figure out who actually owned mortgages. That made a test for homeowners facing foreclosure or relief from their loans, as need might have arisen to realize who held their mortgages to sort out some form of cure.

Features

• While MERS can save time and recording costs, it has drawn analysis for making it hard to see who actually is the current owner of a mortgage.
• Mortgage Electronic Registration System (MERS) is a privately owned database that the mortgage banking industry made to just the registration and transfer of mortgages.
• By tracking mortgage transfers electronically, MERS takes out the need of a lender to register the transfer with the province recorder each time the loan is sold starting with one bank then onto the next.
• Sometimes MERS itself is designee as the mortgage lender (mortgagee).