MERS is short for Mortgage Electronic Registration System.
The company was created by the mortgage loan industry in order to streamline the process of creating mortgage loans and then selling them to investors. It is also heavily engaged in the system for the electronic registration and tracking of promissory notes nationwide.
Formerly, if 1st National Bank sold a mortgage to Acme Investors, two things would have to happen. In the case of Robin, in our prior example, 1st National would send Robin’s original promissory note to Acme Investors. This would require delivery fees plus insurance in case the note were lost. In addition, 1st National would have to file something in the real estate records showing that the mortgage or deed of trust had been assigned to Acme, which would also cost money. There would also be a lot of room for human error in failing to do things or doing them incorrectly.
MERS was created to solve this problem. Members can execute mortgages in the name of MERS as the nominee. For example, Robin’s loan money might have come from 1st National, but her note and mortgage might say she owes the money to MERS as the nominee. In addition, her mortgage or deed of trust will name MERS (as the nominee) as the secured party.
MERS can be the nominee for anyone without him or her having to send documents through the mail, buy insurance, or change information in the real estate records. When 1st National sells Robin’s loan to Acme Investors, MERS computers will show that it is now the nominee for Acme Investors instead of 1st National Bank. A few clicks on the keyboard, and everything else happens automatically. It is a very streamlined, efficient, and economical system. Foreclosures are conducted in the name of MERS, but anyone in the world might be the actual owner of the note and mortgage, and the one calling the shots.
You can identify the servicing company for the mortgage loan in the following manner. Call MERS at (888) 679-6377. By calling the toll-free number, you can enter the eighteen-digit Mortgage Identification Number (MIN) and hear an automated reply with the name and contact information of the servicer. The website will let you obtain the same information by using the MIN, borrower name, or property address.
This MORTGAGE is made this 31st day of December, 2007 between the Grantor Robin Smith, herein “Borrower,” and the Mortgagee, Mortgage Electronic Registration Systems, Inc. (“MERS”), (solely as a nominee for Lender, as hereinafter defined, and Lender’s successors and assigns.) MERS is organized and exists under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI, 48501-2026, tel. (888) 679-MERS. Countrywide Bank, FSB, A Federal Savings Bank (“Lender”) is organized and exists under The laws of the United States and has an address of 1199 North Fairfax Street, Suite 500, Alexandria, VA 22314.
I find there is usually less opportunity for error if you use the MIN. It is located on the first page of the mortgage, preceded by the letters “MIN.”