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Article of the Month for April 2003 Printer friendly version

Mortgage Electronic Registration System (MERS)


If you've ever tried to locate an owner of a mortgage or trust deed for any reason, or tried to figure out who your lender was, or tried to find out who's servicing a particular loan and got nowhere, then this free, mortgage locator service is for you.

What is it?
The service is called MERS (Mortgage Electronic Registration System). It began at a 1995 meeting of loan industry nabobs and emerged in 1999 as a viable business entity. It was created to avoid the cost and delays caused by recording a never ending stream of assignments of mortgages and deeds of trust being traded between most of the institutional investors within the secondary mortgage market.

To avoid the need to record such assignments between its members, MERS holds title as nominee for the true mortgagees and beneficiaries in its system and as transfers occur, they are recorded on MERS' computer in a book entry system similar to the transfer of stocks.

Today, just four years later, MERS claims that approximately 50% of all newly recorded, institutional trust deeds and mortgages, now bear their name and identification number as the nominee grantee or mortgagee on said liens and that their goal is for all institutional mortgages to be registered in their system in the near future.

Once in the system, MERS will always appear to the public, as the nominee grantee or mortgagee of record for the life of the loan, unless an assignment from MERS is obtained. Therefore, there's no need to record any MERS member's trust deed/mortgage assignments since all such assignments are tracked internally within MERS.

MERS' computerized registration system is nationwide in scope. It constantly monitors thousands of daily changes in the ownership and servicing rights of recorded trust deeds and mortgages being transferred between its member firms.

Its aim is to replace our overwhelmed paperwork system of recording individual assignments of trust deeds and mortgages throughout the 4,000+ recorder's offices within the United States. All trust deeds and mortgages continue to be recorded like always. It's just the assignments of such documents between MERS' members that aren't being locally recorded any more.

Cleaning up the monumental backlog of yet-to-be-recorded assignments with one centralized computer registry provides an instantaneous determination as to who owns a particular loan and/or who is servicing it-allowing for more rapid loan payoffs, eliminating reconveyance glitches, etc. And no longer does one have to wonder who owns or is servicing a particular loan when the involved lender goes bankrupt or is swallowed up and seemingly lost in some frenzied, daisy chain of countrywide bank mergers.

How it works
At the time a new trust deed or mortgage is created by a lender member in the MERS system, it is assigned a unique 18 digit MERS Identification Number (MIN) for electronic tracking purposes. The MIN appears on the face of the recorded trust deed or mortgage. Also, whenever a non-registered mortgage is sold to a mortgage buyer, who is a MERS participant, it will be forever tagged with its own, unique MIN.

MERS acts as a nominee for all of its grantee/mortgagee participants and is recorded as such in the public record as the one and only grantee/mortgagee for any and all trust deeds or mortgages generated by its members, regardless of which institution is the actual owner of the loan. That means that all subsequent documents pertaining to that trust deed or mortgage will be in MERS' name, as nominee too. That includes documents such as a Notice of Default, Recission of Notice of Default, Notice of Trustee's Sale, Trustee's Deed, a Reconveyance, etc.

Who benefits?
Since beginning its daily operations in 1999, MERS has greatly benefited loan originators, servicers, wholesale and retail lenders, document custodians, settlement agents, title companies, insurers, investors, county recorders and finally, the consumer.

Locating a Lender/Servicer of a trust deed or mortgage
Almost all new institutional trust deed/mortgage liens now being recorded bear MERS' mortgage identification number so now it's just a matter of a minute or two to find out who is the current owner of an existing mortgage that's in their system.

There are two ways to find out the name of a loan servicer for a particular trust deed in MERS' system. The most expeditious way is to find MERS' 18-digit Mortgage Identification Number (MIN) on the face sheet of the recorded trust deed/mortgage (or the recorded assignment of same).

Or, if you can't find the MIN number on a trust deed or mortgage because it was recorded prior to 1999 (when MERS began its daily operation) then you can use the borrower's 9-digit social security number (SSN) in place of the MIN number.

With the MIN or SSN in hand, call the toll free Voice Response Unit (VRU) number at (888) 679-6377. The VRU operates 7 days a week, 24 hours a day. Upon calling the VRU and inputting the MIN, you will receive the name and phone number of the current trust deed/mortgage servicer.

If you don't have either the MIN or the payor's SSN, then call during the hours of 8:00 AM to 8:00 PM EST, Monday thru Friday, at the MERS help desk (888-680-6377) and provide the borrower's name and/or property address to get the mortgagee information. •

Information provided by this website is for informational purposes only and is not a substitute for professional advice. Please consult your investment advisor and/or attorney before entering into any transaction. Read our privacy policy.

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