Here is an overview of the latest updates to the MERS electronic register
HousingWire recently spoke with Chris McEntee, Vice President of ICE Mortgage Technology, about the latest MERS eRegistry updates and what they mean for the industry.
HousingWire: The MERS eRegistry is the only such registry in the industry. What kind of impact does this have on lenders?
Chris McEntee: For more than 25 years, MERS has been an integral part of the evolution of the mortgage industry from paper to electronic mortgages. As a legally proven common agent serving as a mortgagee in public land records, eliminating the need for assignments of mortgages, lenders save up to $125 on each loan when administration is transferred. The addition of the MERS electronic register approved by lenders, investors and stakeholders more than a decade ago shows the scalability of its business model. The industry benefits enormously from this unique registration system to establish ownership of electronic promissory notes (eNotes) which, given their nature, can be reproduced multiple times. The MERS e-Register provides additional value by eliminating the guesswork, operational expense and unnecessary counterparty risk when a lender, investor or stakeholder wishes to ensure the validity and authenticity of an e-note or specific mortgage document.
Housing wire: How does the MERS electronic register increase the efficiency of registering mortgage transactions, and why is it important?
Chris McEntee: The MERS electronic register as a system of record identifies the electronic note holder and, by facilitating sales transfers, creates an efficient legal mechanism to transfer the right to collect and enforce the loan. Due to lower processing costs and better access to information, loans represented by electronic notes can be more valuable to investors than equivalent loans using paper notes. Lenders can reduce costs with electronic notes by streamlining the post-closing and certification process, eliminating transportation costs, and reducing costs associated with lost, destroyed, and missing paper notes. Using MERS as a mortgagee and MERS eRegistry saves the industry millions of dollars a year, not to mention eliminating the operational complexity of tracking paper documents.
Housing wire: MERS now offers RON video storage. Can you explain how it works and what it means for lenders?
Chris McEntee: Remote online notarization (RON) has become a key element in the production of digital mortgages, and it is only natural that MERS will play a role in supporting adoption. In many cases, an e-note is part of a mortgage where the closing documents are notarized through the RON process, so it makes sense to tie the mortgage and e-note to the video that commemorates the closing ceremony. It also links the video to the MERS mortgage identification number, or MIN, which is widely adopted in the industry as a unique loan identification, or “ULI” data point. This builds on and extends a proven scalable infrastructure that the industry has benefited from for over two decades. This is the first such repository for RON video storage; allowing lenders to reliably identify that a loan was a RON transaction.
It is important to mention that non-eNote transactions can also be tracked. Support for all RON transactions within MERS offers the opportunity to further expand a single source of truth for the entire industry. While capitalizing on what MERS does best by providing a standardized repository.
Housing wire: ICE reports a 46.5% year-over-year increase in the number of companies transacting on the MERS electronic register in April. What implications does this have for the future of digital mortgages?
Chris McEntee: We are seeing widespread adoption of digital mortgage infrastructure across the industry. As the industry makes this transition from analog to digital, the promise is immense for less friction, lower costs and greater responsiveness for the consumer, lender and investor. What is encouraging is that industry invested in MERS years ago and it is now paying off with more diverse use. We have built the launch pad for the digital future.