Ask Christy – What is MERS?

When Jeremy was signing his closing documents last week, he had a great question about one of the forms he was signing.  It was a form to authorize MERS to be the “original mortgagee”.  What the heck does that mean?

According to the MERS official website, MERS (short for Mortgage Electronic Registration Systems) is a privately owned national electronic database that tracks changes in mortgage servicing rights.  In plain English, it is the website that can tell you who currently holds your mortgage and where you should be sending your payments.

MERS simplified

Why this is good for you:

Your lender is almost guaranteed to sell your loan to someone else to “service”  (aka – take your payments and get your interest).  They may do it shortly after you close, they may do it years after you close but it is common to have a loan change servicer several times over the course of a 30 year mortgage.  It can be tricky to keep track of where to send your payments.  As a new home owner, you are also vulnerable to fraudulent letters telling you to send your payment to a new “servicer”, but in reality that is a scam that is trying to get your mortgage payments.   In order to reduce the confusion and avoid falling victim to a scam, if your mortgage has MERS as the mortgagee, you can log in here anytime and see exactly who holds your mortgage and where to send payments.

The bottom line:

You don’t really get a choice whether or not your lender has you enroll in MERS.  If you do get enrolled, enjoy the ease and peace of mind it provides.  If you don’t get enrolled, that is one less piece of paper to sign.  Good and bad to both sides of this coin.

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