Default: Keep Me Up To Date

Julia Macnair
Rachel Weber
 Agenda

 Property preservation  Bankruptcy

 Loss mitigation  Foreclosure
 Modifications  Taking title
 Subordinations  Q&A
 Assumptions
 Property
Preservation
 Member Profile Changes

 New member contact type

– Property preservation contact: name, title, phone
and email
– Visible on Member Summary page in MERS® Link
 MIN Registration/Update

 Property preservation Org IDs

– Added during MIN registration
– Added to an active MIN
– Added to MIN in Foreclosure Complete status
 MIN Summary Information

 Property preservation contact visible

– MIN summary
– MERS® Link summary (if populated)
 Org ID is hyperlink to Member Summary page with
property preservation contact information
 Org name is hyperlink to property preservation
company’s URL
 Property Preservation

Kate Bonthius, Business Integration Manager

Direct: (703) 761-1283
Fax: (703) 748-0183
kateb@mersinc.org
 Loss
Mitigation
 Paid In Full

 Liquidation via lien released/extinguished in land

records
– Deed in lieu
– Short sale
– Charge-off (See Training Bulletin 2009-04): only
applicable when lien release is recorded
– Third party foreclosure
– Payoff (performing loan)
 Paid in Full

 Paid in full deactivation

– If subservicer is named, only subservicer can perform
transaction
 Paid In Full QA:
Transactional Standards
 Payoff
– Change MIN status to “Paid In Full,” enter the Servicer
Liquidation Date (Effective Payoff Date) on the MERS®
System within seven calendar days of payoff or
deactivation date on company’s servicing system
 Paid In Full QA:
Document & Recording Standards
 Lien release/reconveyance/discharge /satisfaction
 Payoff or partial release for MOM and non-MOM:
– Prepare lien release naming Mortgage Electronic
Registration Systems, Inc. as mortgagee, signed as
MERS by officer authorized on MERS corporate
resolution
 Paid in Full QA:
Document and Recording Standards
 Place MIN and Servicer Identification System phone
(888-679-6377) on visible location on page 1 of lien
release but not in space reserved for county recorder
 Send lien release for recording within state/county-
imposed timeframes, or within 45 calendar days after
effective payoff date, whichever is shorter
 Paid In Full Reports

 Paid in Full Verification Report (DK)

– All payoff transactions or reversals entered in previous
processing cycle
 Payoff Reject Report (DP)
– All batch payoff transactions or reversals, rejected in
previous cycle, along with reason for rejection
 Deactivation Summary Report (DD)
– All MINs deactivated since last processing cycle,
grouped by deactivation reason
 Reflecting Charge Offs
on the MERS® System
 Training Bulletin, Number 2009-04, Reflecting Charge
Offs on the MERS® System, 06/30/2009
 If a lien release or satisfaction is recorded for the
loan, the loan must be deactivated as Paid in Full on
the MERS® System
– For example, if you “write off” or “charge off” the last
$100 of a loan and release the lien, it is considered
Paid in Full
 Reflecting Charge Offs
on the MERS® System
 If the lien has been extinguished, the loan must be
deactivated on the MERS® System because lien is no
longer valid
– If a Deed in Lieu of Foreclosure is accepted, a Paid in
Full deactivation is used even if no lien release or
satisfaction has been recorded, because lien is
extinguished by new deed
– Use date the transferred deed was sent for recording
as Lien Release Sent Date
 Reflecting Charge Offs
on the MERS® System
 If you still intend to collect on now unsecured note,
use a Transfer to Non-MERS Member deactivation
– Enter 9999999 for New Servicer Org ID and your
organization’s name and address for the Assignee
– Example: second lien extinguished as a result of
foreclosure completed on first lien for that property
 Reflecting Charge Offs
on the MERS® System
 If lien remains valid even if accounting shows loan as
charged off, no deactivation needs to occur on the
MERS® System
 Loan remains active on the MERS® System until
either satisfied on property sale or extinguished by
recording of new deed at which time the loan must
be deactivated as outlined above
 Questions? Contact MERS Product Performance
Department: ppd@mersinc.org
 Impact On Junior Lien Holder

 In general: when first mortgage is in foreclosure,

second loan or junior lien gets wiped out
 Doesn’t release borrower from debt
 Lender pursues collection via promissory note signed
by the borrower
 Lender may charge off debt but pass it to collection
agency for recovery
 MERS® System must reflect appropriate status
Modifications
 To record or not to record…

 If your investor requires you to record modification

agreement, modification info (including recording
information) must be entered into MERS® System
 Training Bulletin 2008-07

 Modification agreement volumes on the rise

 Must maintain current lien information
– System
 Must include modification updates and recording details
 Applicable to “cramdowns” (i.e., loan modified during
bankruptcy)
– County land records: abide by MERS QA document and
recording standards for modifications
 MERS® System Release Bulletin 17.0

 Lets members use batch update transaction to add

new modification agreement
 All modification agreement information must be
provided, including recording information
 Batch process does not support updates to existing
modification agreement
 See Technical Integration Handbook for flat file
specifications, or EDI Implementation Guide for EDI
X12 specifications (www.mersinc.org)
 QA Document and Recording Standards
For Mom and Non-MOM Loans
 Prepare doc naming Mortgage Electronic Registration
Systems, Inc. as mortgagee, signed as MERS by
certifying officer, signed by lender representative in
individual’s own capacity
 Place MIN and Servicer Identification System phone
(888-679-6377) in visible location on page 1 but not
in space for county recorder
 Send modification for recording (if required) no later
than 7 calendar days after effective date of
agreement
Subordinations
 Transactions & Documents

 Lien type indicator

– Registration
– MIN update
 Sample documents in the Quality Assurance
Procedures Manual
– Subordination agreement
– Subordination of lien
Document & Recording Requirements For
MOM and Non-MOM Loans
 Prepare doc naming Mortgage Electronic Registration
Systems, Inc. as mortgagee, signed as MERS by
certifying officer, signed by lender representative in
individual’s own capacity
 Place MIN and Servicer Identification System phone
(888-679-6377) in visible location on page 1 but not
in space for county recorder
 Send document for recording (if required) no later
than seven calendar days after effective date of
agreement
Assumptions
 Assumptions

 Servicer or subservicer of MIN must update borrower

info on MERS® System when loan is assumed
 Action = assumption when
– new borrower legally assumes responsibility for
outstanding mortgage debt
– new borrower is added to existing loan obligation
– existing borrower is legally removed from outstanding
mortgage debt
 Assumptions

 During assumption all borrowers who remain

obligated for loan must be entered as current
borrowers
Document & Recording Requirements For
MOM and Non-MOM Loans
 Prepare doc naming Mortgage Electronic Registration
Systems, Inc. as mortgagee, signed as MERS by
certifying officer, signed by lender representative in
individual’s own capacity
 Place MIN and Servicer Identification System phone
(888-679-6377) in visible location on page 1 but not
in space for county recorder
 Send document for recording (if required) no later
than seven calendar days after effective date of
agreement
Bankruptcy
 Bankruptcy

 Training Bulletin 2008-6: bankruptcy dos and don’ts

 No special transactions on the MERS® System
 If bankruptcy halts foreclosure, servicer should
choose:
– to reinstate loan, OR
– keep in Foreclosure Pending mode, AND
– remain consistent with this decision
 Bankruptcy

 When debtor declares bankruptcy, a proof of claim

can be filed in the name of Mortgage Electronic
Registration Systems, Inc.
 Motion for Relief from Stay may be filed in name of
MERS. If MERS is the moving party, MERS must also
be the note holder.
 Disclose to court MERS/servicer relationship
 If filed in name other than MERS, an assignment from
MERS must be filed and recorded
Foreclosures
 Foreclosure Dos and Don’ts

When a member files a foreclosure in the name of

MERS:
 DON’T allege that MERS “owns” the note
 DO always plead that MERS is the mortgagee as
nominee of lender, its successors and assigns
 DON’T file foreclosure action as MERS if alleging note
is lost; certifying officers cannot file Lost Note
Affidavit in the name of MERS
 Foreclosure Dos and Don’ts

 DO make sure note is endorsed in blank at the time

of foreclosure so MERS can be the holder
 DON’T plead MERS as a co-plaintiff
 DO contact the MERS Law Dept. promptly if
borrower files counterclaim or contests MERS’
standing (800-646-6377 or mers@mersinc.org) and
send copy of lawsuit or counterclaim
 See MERS Rules of Membership, Rule 8 for additional
information
 In Florida…

 MERS has legal right to foreclose, but chooses not to

exercise this right. Must assign out. See Rule 8.
 Other Foreclosure Reminders Per
Anouncement Bulletin 2009-06
 If a member is named as defendant in lawsuit
involving MOM mortgage loan that the member
originated, and MERS is not named as a defendant,
please alert MERS Law Department right away
(mers@mersinc.org). This should be done even when
the MERS member no longer holds any interest in the
mortgage loan. Do not simply ignore the lawsuit.
 Other Foreclosure Reminders Per
Anouncement Bulletin 2009-06
 Any MERS member foreclosing a loan in member’s
name, or having MERS foreclose the lien as
mortgagee, and MERS holds another mortgage lien
for another mortgage loan on the property, member
should instruct its counsel that MERS must be named
as a defendant as the mortgagee for other mortgage
loan and be served with the lawsuit
 Other Foreclosure Reminders Per
Anouncement Bulletin 2009-06
 Make sure that when MOM mortgages are recorded,
county recorders and clerks are indexing mortgages
correctly to reflect MERS as the mortgagee,
grantee, etc.
 Provide counsel representing MERS with proper
documentation, information and an explanation of
MERS and its interest in the mortgage.
 When in doubt, contact MERS Law Dept
(mers@mersinc.org)
 Pending (Option 1), assigned to Servicer

 Pending (Option 1), assigned to Servicer

– Execute and record assignment from MERS (indicates
loan will not be in MERS’ name for foreclosure process)
 Servicer or subservicer must update MERS® System at
the time of first legal action
– within seven calendar days of date on your
servicing system
– If subservicer is named, then only subservicer can
perform this transaction
 Pending (Option 1), assigned to Servicer
Assignment Standards
 Prepare assignment from Mortgage Electronic
Registration Systems, Inc. to other entity
 Place MIN and Servicer Identification System phone
(888-679-6377) in visible location on page 1 of
assignment
 Assignment must be signed by individual authorized
on member’s MERS corporate resolution
 Send assignment for recording within 14 calendar
days of status change on the MERS® System
 Pending (Option 2), retained on MERS

 Pending (Option 2), retained on MERS indicates

loan will remain in MERS’ name throughout
foreclosure process
– Within seven calendar days of first legal action
– If subservicer is named, then only subservicer can
perform transaction
 Pending (Option 3), iRegistration only

 New for iRegistrations:

– iRegistration can only be entered into Pending (Option
3), iRegistration
– Loan can be either reinstated into unique Option 3
reinstatement or deactivated by Foreclosure Complete
 Pending (Option 3), iRegistration only

 iRegistrations blocked from using Foreclosure

Pending (Option 1), Assigned to Servicer
 MIN Find group search can now search for new
foreclosure statuses
 XML MIN Inquiry and Servicer History Responses will
provide new foreclosure statuses
 Reinstate or Modify (Option 1)

 If MIN reinstates or modifies after pending status is

reported, MERS® System must be updated
 If subservicer is named, then only subservicer can
perform transaction
 Reinstate or Modify (Option 1)

 Pending (Option 1)  Reinstated or Modified (Opt 1)

– Assigned back to MERS: if recording an assignment
back to MERS
– Not assigned back to MERS–Deactivate: if loan not
assigned back to MERS and deactivated from MERS®
System
– Convert to iRegistration: MOM and Non-MOMs in
Foreclosure Pending (Option 1), Assigned to Servicer:
can be reinstated as an iRegistration if loan not
assigned back to MERS but kept active as an
iRegistration
 Reinstate or Modify
(Option 1) Assigned Back to MERS
 If reinstating or modifying (Option 1) back to MERS,
then assignment from servicer/investor/insurer back
to MERS must be executed
– Prepare assignment to Mortgage Electronic
Registration Systems, Inc.
– Place MIN and Servicer Identification System phone
(888-679-6377) in visible location on page 1 of
assignment
– Send assignment for recording within 14 calendar days
of status change on the MERS® System
 All of the
document
samples can be
downloaded from
the MERS®
Corporate
Website,
www.mersinc.org
.
 Reinstate or Modify (option 2)

 Pending (Option 2) Reinstated or Modified

(Option 2)
– Within seven calendar days
– If subservicer is named, then only subservicer can
perform transaction
 Reinstate or Modify (option 3)

 Pending (Option 3) Reinstated or Modified

(Option 3)
– Within seven calendar days
– If subservicer is named, then only subservicer can
perform transaction
 Foreclosure Complete REOs

 Deactivation transaction on the MERS® System

 When loan in foreclosure sale and redemption period
expired, Foreclosure Complete transaction must be
performed:
– Within 7 calendar days
– Remain consistent using sale date or redemption
expiration date
– If subservicer is named, then only subservicer can
perform transaction
 System Corrections

 Pending foreclosure status entered in error or status

now invalid: perform Foreclosure Status Reset
transaction to change MIN back to active
 If subservicer is named, then only subservicer can
perform transaction
 To update/correct Reinstated or Modified MIN
status, perform Foreclosure Pending transaction
 System Corrections

 If Foreclosure Complete has been reported in error

or sale rescinded, perform reversal transaction to
return MIN to previous status
– Servicer and subservicer can perform deactivation
reversal transaction
 Foreclosure Reports

 Foreclosure Verification Report (DA)

– Foreclosure transactions successfully entered since
previous processing cycle
 Foreclosure Reject Report (DF)
– Batch foreclosure transactions rejected during
previous cycle
 Foreclosure Reports

 Past Due Foreclosure Terminations Report (DI)

– MINs in foreclosure pending that exceeded days
without update to foreclosure or MIN status
 Deactivation Summary Report (DD)
– MINs deactivated since last processing cycle
Taking
Title
 Taking Title

 In general MERS should not take title at end of

foreclosure
 May be unavoidable in CT, LA, MI, MN, MT, NM,SD,
TX and VT
 Subsequent deed must be issued asap to servicer/
investor so MERS is not titleholder for extended period
 If this happens, your MERS corporate resolution
appoints certifying officers with authority to execute
deeds on behalf of MERS
 Reference Materials

 Training Bulletin 2008-06: Reminder of Requirements

Regarding Motions for Relief from Stay and Proof of
Claims filed by MERS
 Training Bulletin 2008-04: What a “MERS in Title”
Notification Means
 Training Bulletin 2008-03: Member Responsibility to
Update MERS® System Regarding Foreclosure Events
 Announcement 2005-05: MERS Suspends
Foreclosures in Florida
 Rules of Membership, Rule 8
Q&A