Introduction to MERS

What is MERS?

MERS is a name frequently heard in court in connection with mortgage issues. Much litigation revolves around mortgages and often it is unclear to litigants how MERS operates. Often the issue is whether MERS should be a party to the litigation or if it has standing to be a party. Of course, each is case is different.

MERS is short for MERSCORP, Inc. which operates a national electronic registry system that tracks changes in mortgaging servicing rights and beneficial ownership interests in mortgage loans that are registered in its system. MERS has a subsidiary that is the mortgagee of record and nominee for the beneficial owner of some mortgage loans. There is a difference between recording and registration. A mortgage is recorded in the county register of deeds to perfect the lender's security interest.

A MERS member may also register the mortgage information with MERS as a separate function for tracking changes in the serving and beneficial ownership of the mortgage. There are three types of loans registered with MERS. First, loans where MERS is the original mortgagee. Second, loans where the mortgage is assigned to MERS. Third, loans registered solely for tracking where MERS is not the mortgagee or assignee.

It is important to note that no mortgage rights are transferred by MERS. MERS only tracks changes in servicing rights and beneficial ownership interests which are not recorded. MERS remains the mortgage lien holder and there is no need to record assignments of the mortgages. An assignment only needs to be recorded if the mortgage is assigned to a non-MERS member as MERS cannot hold a mortgage for a non-MERS member. More information is available at www.mersinc.org which I think is a useful starting point for most MERS issues.