The adaptation of MERS (Mortgage Electronic Registration Systems, Inc.) for the CMBS and multifamily marketplace is designed to eliminate the repurchase risk and costs associated with preparing, recording, and tracking mortgage assignments.
Mortgage assignments impose unnecessary costs on commercial originators and issuers. Additionally, servicers, special servicers, custodians and trustees are subjected to operational problems caused by incorrect, unrecorded and missing mortgage assignments over the life of the loan.
MERS Benefits
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MERS eliminates the threat of loan repurchase due to defects in loan documentation related to missing, incorrect or improperly recorded assignments.
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Commercial originators and issuers save hundreds to thousands of dollars (in the case of cross-collateralized loans) in preparing and recording assignments. Where the originator has not recorded a MERS as Original Mortgagee (MOM) security instrument, the issuer saves the costs of assigning to the Trust by having the originator assign to MERS.
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Commercial servicers benefit by a more efficient lien release process due to eliminating missing interim assignments.
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Special servicers benefit by not assigning out of the Trust to foreclose, and not having to assign back to the Trust if the loan reinstates. Additionally, eliminating missing interim assignments enables special servicers to foreclose more quickly and efficiently.
Here's How It Works:
MERS® Commercial is a web-based, real-time application. Originators reserve a unique Mortgage Identification Number (MIN) from a web-based MIN generator within MERS® Commercial. The MIN is then affixed to the promissory note and associated security instrument(s) that name MERS as original mortgagee and nominee for the lender. With the recording of the security instrument(s), MERS becomes the mortgagee in the county land records and no assignments are required during a subsequent sale and transfer of the loan between MERS members.
The originator or issuer enters the MIN, along with the required information to uniquely identify the loan and its collateral on MERS® Commercial immediately after closing.
Once registered, the issuer (or custodian) updates MERS® Commercial to reflect changes in ownership due to securitization, foreclosure, repurchase, or payoff. All parties with an interest in the loan can easily monitor progress towards achieving final certification and other major life of loan events.
Reports are available which reflect the interests of all parties to loans registered with MERS.
For more information, contact Doug at dougd@mersinc.org or call 1-800-646-MERS (6377)
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