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How to buy Notes – “What is MERS? And how does it affect us as Note Buyers?”

How to buy Notes – “What is MERS? And how does it affect us as Note Buyers?”

August 4, 2008 by notebuyingprofits.com  
Filed under FAQ, Note Buying 101

I just got the following ‘how to buy notes‘ question:

“What is MERS, and how does it affect us as note buyers?”

My reply:

MERS stands for the Mortgage Electronic Registration System – it’s a service that most large servicers sign up with and what it does, in a nutshell, is to automate assignments so that the servicer or the note buying investor doesn’t have to record them.

How does it work? As an investor, you pay a membership fee of under $1,000, and you then pay a per-assignment fee if you’re assigning a loan FROM yourself TO someone else. You don’t pay anything when you receive an assignment of mortgage or deed of trust (e.g. when you’re buying notes), just when you’re selling (v. small fee and the fee doesn’t even apply in all cases).

Should I worry about it? No. You may see loans that appear to be currently held by MERS, but those are merely naming MERS as the beneficiary on a mortgage – they do not mean that MERS is the investor on the loan. It never is.

So what should I do differently with MERS loans? Nothing. Treat them as any other loan and know that when it comes time to receiving an assignment, you should take an assignment with the following words in it: “…in favor of Mortgage Electronic Registration Systems, solely as nominee for SELLING LENDER”.

You won’t get anything different on a MERS loan than you will on a non-MERS loan, unless you’re a MERS customer yourself.

The nice thing about MERS loans is that you can take the MIN (Mortgage Identification Number – included on many data tapes when loans are assigned to MERS) and plug that number into the following website.

It’ll tell you who the beneficiary of record is, and their contact number.

MIN lookup: http://www.mers-servicerid.org.

Nothing ventured, nothing gained.

Dean

Hope you enjoyed this article in our series on how to buy notes.

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Comments

One Response to “How to buy Notes – “What is MERS? And how does it affect us as Note Buyers?””

  1. Mike Williams on December 3rd, 2009 11:40 am

    MERS is named as benificary on our Green point note of 2002.
    They just told Recontrust to foreclose…do they have standing to do so?
    Thanks,

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