Transfers: It Takes Two

Julia Macnair
Rachel Weber
 Agenda

 Where to get started

 MERS requirements
 Types of transfer transactions
 Confirming/rejecting batches
 Canceling/modifying batches
 Key Reports
 QV
 Resignation process
 Where do I get started?

 1 Step versus 2 Step Registrations

– Does my trading partner allow 1 step registration?
 Requirements

 Timeframe for initiating transfers

 Timeframe for confirming or rejecting transfers
 Options to use for Transfer Date
– Importance of Transfer Date as a result of Helping
Homeowners Save their Home Act of 2009 and MERS®
Investor ID Program
 Transfers of Servicing

 Create TOS and Create TOS/TOB

 Record sale of servicing rights to a new servicer
 Confirmation
– Buyer performs physical transaction to confirm
– Servicer/subservicer’s confirmation transaction is
automated in the system
 Expired batches revert MINs to prior servicer
– 31 days after the later of Transfer Date or Batch
Creation Date
 Transfer of Servicing continued…

 Create TOS Option 1 (Default by Servicer)

– Allows investor to perform transfer of servicing from
one MERS servicer to another
– Only available to Option 1 lenders
– Access is not automatic
– Transaction would override any pending TOS/TOB
transfer
– No confirmation is required
TOS Option 1

The Current Investor field

defaults to the Org the user is
functioning as.
 Flow and Seasoned MINs

• Flow MINs = 269 days and less

• Seasoned = 270 days and greater
• Intermingle
• Fees
 Transfer of Beneficial Rights Option 1

 Transfer of security interest held under a mortgage

or deed of trust for a loan or a group of loans to a
new owner or investor
– Fannie Mae
– Freddie Mac
– Ginnie Mae
– RFC
– FHLB’s
 Transfer of Beneficial Rights Option 1

 Investor sends transmission to MERS from a system

other than MERS
– No confirmations required for Option 1 transfers
– Once Transfer Date is reached, active MINs will
transfer to new investor
– Option 1 investor replaces any Option 2 investors on
loan(s)
 Transfer of Beneficial Rights Option 2
What’s new…
 Initiation
– Effective with June 2010 Release: create TOB Option 2
page updated to allow only current servicer or
subservicer ability to initiate a TOB Option 2 batch
– Non-MERS investor Org ID 1000002
 Transfer of Beneficial Rights Option 2

 Confirmation required by both the current & new

investor
 Passive investors
 Expired batches revert MINs to prior investor
– 31 days after the later of the Transfer Date or the
Batch Creation Date
 Interim funder must release interests in loans
– Coexisting Security Interest Report
 Confirming/Rejecting Batches
 Level  Participating org in the
– Batch transfer
– MIN – Current servicer
– Pool – Current subservicer
 Expiration date – Current investor
– New servicer
– New subservicer
– New investor
Confirming/Rejecting Batches

Select the “Confirm” or “Reject” action and click

Submit button to execute the batch level
confirmation

Select the “MIN” or “Pool Level

Confirmation” hyperlinks to
Confirm or Reject at MIN or Pool
level
 Cancel/Modify Batch

 TOS menu
 TOB menu
 Only transfer initiator can cancel or modify a batch
 MINs may be added or deleted from existing batch
 Adding to, or deleting MINs from batch will not reset
confirmations or transfer date
Cancel Batch

Review the Batch level information

before pressing the “Cancel Batch”
button

Select the “Total

MIN” hyperlink to list
the MIN(s) within the
batch
Modify Batch

Click hyperlinks to add

or delete MINs from
existing batch.

Review batch
level
information
 Unusual Transfer Scenarios

 MIN was not registered within 10 days of closing and

agency should be named as investor
– Requires registration directly into agency’s name
 Agency repurchase
 Unusual Transfer Scenarios

 An agency is named as investor but you didn’t

transfer to them
– An Option 1 TOB has occurred
– Transfer servicing rights only
– If GNMA (1000249) is investor, servicing can only be
transferred to a GNMA-approved servicer
– GNMA servicers must have Issuer ID number included
on MERS member information page
 Key To Successful Transfers

 Monitor your MERS reports!

 Key Reports: Transfer of Servicing

 Pending Transfer of Servicing Rights Report (SA):

transfer of servicing batches created and awaiting
confirmation by current investor, new servicer, new
subservicer or investor but have not yet reached
scheduled transfer date
 Overdue Transfer of Servicing Rights Report (SE):
transfer of servicing batches not yet confirmed by all
parties, but where sale or transfer date has passed
 Key Reports: Transfer of Servicing

 Physical Transfer of Servicing Rights Report (SC):

physical transfer of servicing rights to servicer when
transfer date has occurred; also lists all loans that did
not process on transfer date due to rejection by old
or new servicer
 Expired Transfer of Servicing Rights Report (SD):
transfer of servicing batches that surpassed 30-day
grace period without completing confirmations;
batches expire 30 days after later of the transfer date
or batch creation date
 Key Reports: Transfer of Servicing

 Canceled Transfer of Servicing Rights Report (SG):

transfer of servicing rights batches cancelled by batch
initiator
 Transfer of Servicing Rights Rejects Report (SF):
transfer of servicing transactions rejected in previous
processing cycle due to operator/system error
 Modified Batch—Transfer of Servicing Rights Report
(SJ): MINs added to or deleted from pending and
overdue TOS batches
 Key Reports: Transfer of Servicing

 Current Investor Changed for Pending Transfer of

Servicing Rights Report (SH): MINs that existed
simultaneously in transfer of servicing rights batch
and Option 1 TOS or Option 1 TOB batch (and where
current servicer or investor was replaced)
 MINs Deleted from Pending Transfer of Servicing
Rights Report (SI): MINs deleted from pending
transfer of servicing rights batch because MIN also
existed in Option 1 transfer of beneficial or servicing
rights batch
Key Reports: Transfer of Beneficial Rights

 Pending Transfer of Beneficial Rights Report (BA):

transfer of beneficial rights batches with future
transfer dates; confirmations performed by new and
current investor reported here up to transfer date
 Physical Transfer of Beneficial Rights Report (BB):
physical transfer of beneficial rights to investor when
transfer date has occurred; also lists all loans that did
not process on transfer date due to rejection by old
investor or new investor
Key Reports: Transfer of Beneficial Rights

 Overdue Transfer of Beneficial Rights Report (BC):

MINs in beneficial rights transfer batches rejected or
not confirmed by required parties before transfer
date (batch now considered overdue)
 Expired Transfer of Beneficial Rights Report (BD):
beneficial rights batches (option 2 only) that
surpassed transfer date (and 30-day grace period)
without confirmation by all parties
Key Reports: Transfer of Beneficial Rights

 Canceled Transfer of Beneficial Rights Report (BG):

lists all transfer of beneficial rights batches canceled
by batch initiator
 Transfer of Beneficial Rights Rejects Report (BF):
transactions rejected in previous processing cycle
due to operator/system error
 MINs Deleted from Transfer of Beneficial Rights
Report (BH): MINs transferred due to Option 1 batch
processing where MINs that also existed in Option 2
batch were deleted from the Option 2 batch
Key Reports: Transfer of Beneficial Rights

 Investor Removed by Option 1 TOB Report (BI): Lists

MINs where investor was removed in Option 1
transfer process
 Summary of Transfer of Beneficial Rights Rejects
Report (BJ): lists, by servicer Org ID, number of
rejected MINs for each servicer Org ID
 Modified Batch - Transfer of Beneficial Rights Report
(BL): lists MINs added to or deleted from pending or
overdue TOB Option 2 batch
 Additional Tools

 MERS® OnLine: tracks batches and sends alert on the

20th overdue day through welcome page (appears
after user logs in)
 MERS Product Performance Specialist: tracks batches
and sends email after 25th overdue day
– Also monitors member reject reports
– Sends notices daily if more than 50 MINs are rejected
in transfer transactions
 Additional Tools

 Portfolio Analysis (OB) Report

– Two free reports per month
– Customizable report, can be requested on demand or
automatically generated monthly/quarterly
– Use it to reconcile data between MERS® System and
your internal system
 Failure to initiate timely transfers can:

 Affect your membership status

 Make it hard to get MINs transferred later because:
– Loans sold to another company or no longer active
– Company you sold to goes out of business
 Burden you with mail and requests about MINs you
are no longer servicing
 Saddle you with loans if your trading partner goes
out of business
 Cause you to incur additional fees
In case of uncooperative trading partners:

 Contact the member directly to follow-up:

– Use Member Search tool on www.mersinc.org or
under Member Summary section of Member
Information in MERS® OnLine to get contact info
 Contact MERS for help to:
– Reach other contacts
– Request to begin the member-to-member petition
process
 Member-to-Member Petition

 When active member fails to respond to requests to

transfer MINs
 Member-to-Member Petition Guide: lists documents
MERS requires before submitting request to transfer
MINs from active member to your organization
 MERS gives non-compliant member 10 business days
to respond or initiate requested transactions
 If non-compliant member doesn’t respond, MERS will
initiate transactions; non-compliant member billed
for transaction fees plus $10 per MIN processing fee
 QV Process

 MERS LITE Aged MIN Servicing (QV) Report:

generated last Saturday of the month
 Includes active Lite members named as servicer with
MINs with note date of 90 days or more
 Report divided between MINs 90 to 120 days and
MINs older than 120 days
 QV warning emailed to applicable Org IDs, addressed
to “All Communications,” “Executive Sponsor” and
global email address (GAL)
 MERS regional director will call for immediate action
QV Process
 QV Process

 Members with MINs 120 days or older naming their

organization as servicer in the MERS® System on 16th
of the month following QV warning e-mail
notification: upgraded from Lite to General
 No upgrade done if member initiated TOS or
TOS/TOB transfer batch & batches waiting
confirmation
 Email sent to “All Communications,” “Executive
Sponsor” and GAL
 QV Process

 If member does not respond, final email and letter

sent stating you are now General member
 General member = higher membership fee
 For all loans listing your organization as servicer on
the MERS® System, you must:
– Update system to reflect all servicing activity
– Respond to all service of process on your loans per
Rule 13
– Notify MERS of all lawsuits per Rule 14
 QV Process

 If you sold the loan, you must:

– Forward documents to new servicer, and
– Complete all transactions to reflect transfers on the
MERS® System
 QV Process

 If you were upgraded but not servicing MINs, you

must transfer all aged MINs to new servicer
 Once all MINs transfer, you can request change back
to Lite status; email request to
mmresponse@mersinc.org
 Request must be submitted at least 45 days prior to
your next renewal period
 Resigning Members
 If member goes out of business, MERS must clear all
MINs naming this member as rights holder
 Membership will be resigned
 Status changes from “Active” to “Resignation in
Process” (RIP)
 MERS identifies trading partners of RIP company
 MERS asks trading partners to research RIP member’s
MINs to see if they should be named rights holder
 Notices vary, depends on if you are named as rights
holder on any outstanding MINs
Re: Member Alert: Resignation of ORG ID/CO.NAME

Please be advised that XXX is resigning their MERS membership. In order to complete their resignation from MERS, MINs naming them
as rights holder in the MERS® System must be transferred.

You are receiving this notice as our records indicate that you previously transacted with this MERS Member.

The attached list of loans names the resigning Member in both the Servicer and Investor fields on the MERS® System. Please review
these loans to determine if you should be named in any capacity or if your records correspond to a different MIN in the MERS ® System
naming your ORG ID. If you should be named as Servicer and/or Investor on any of these MINs, please prepare a text file or Excel
spreadsheet containing the applicable MINs, and submit an online Certificate of Ownership, within 15 days of this email. If MERS has
not already authorized a user in your organization to submit online certificates, please email ppd@mersinc.org to request
authorization.

If you have No MINs, please respond stating that.

If you need more time to research, please respond stating that.
When responding, please include all the ORG IDs that you are responding in regards to.

Please note that transactions authorized by Member Certificate are subject to a $10 per loan certificate processing fee. Additionally,
loans transferred 270 days or more after the Note Date are assessed the then current rate for a seasoned servicing transfer as well as
the $95.00 External Research Fee (pursuant to Announcement 2008-08 if applicable).

Also note that if you change the Investor to your Org ID a Mortgage Loan Transfer Notice showing your organization as the New
Investor will be sent to the Primary Borrower for each affected loan unless you have opted out of the MERS ® InvestorID. This Notice
is generated to comply with the requirements set forth in The Helping Families Save Their Homes Act of 2009 to notify the Borrower
in writing of the transfer of ownership within thirty days of the transfer. As the New Investor, your organization will be invoiced for
the notices.

You may want to consider contacting the MERS Help Desk at (888)-680-6377 or helpdesk@mersinc.org to complete a work order.
Work Orders will be reviewed and an estimate including number of work hours and total price will be provided to you for your
approval. Please inform me if you decide to contract EDS to complete the work order and provide the targeted transfer date.

If you need more information or wish to discuss this further, please contact me.
 Resigning Member

 If you are named as servicer and RIP member is

named investor, you must transfer investor rights to
remove RIP member
 If you don’t, we will send second notice giving you 15
more days to perform transfers
 If you still don’t, we will insert “Unidentified
Investor” in the investor field and you will be subject
to a Quality Assurance Review
 Resigning Member

 If you are named as investor and RIP member is

named servicer, MERS may request certificate of
ownership requesting:
– Transfer of MINs to new servicer, OR
– Transfer of investor rights back to RIP member if you
were named incorrectly
 Effective with June 2010 release, you will need to contact
PPD to initiate TOB for your confirmation as the named
investor will no longer be able to create TOB Option 2
 Process: Resigning Members

 MERS may also ask you to research MINs that don’t

name you in any capacity; if we do…
 Research your records to verify if MINs match:
– Any loans you are currently servicing or have a note
owner interest in
– Another MIN for same borrower and property with
possible duplicate registration
– Loans previously serviced and sold to new
servicer/investor, or are no longer active including
your archived MINs
 Process: Resigning Members

 If you are currently servicing (or you previously

serviced) the applicable MIN(s), submit an Online
Certificate of Ownership form requesting transfer of
MIN(s) to your organization
 Process: Resigning Members

 By submitting certificate, you:

– Assert that you are servicer and/or note owner of
requested MINs
– Acknowledge that new servicer will be responsible for
paying any seasoned transfer of servicing fees and $10
per MIN certificate processing fee
– Agree to indemnify MERS
 Process: Resigning Members

 To obtain Online Certificate of Ownership form, send

email to ppd@mersinc.org with:
– Name of authorized requestor
– Requestor’s MERS® ORG ID
– Requestor’s MERS® OnLine User ID
– Requestor’s business email address
 Certificate of
1000050

I, __Rachel Weber______________, being the __Vice President_________________________ of _MERS Product Performance 1000050 (“Note Owner”) am authorized to certify to the
following:

1. Note Owner has purchased the servicing rights and/or promissory note ownership interests of the MERS Registered Mortgages listed on Exhibit A attached to this Certificate from _ABC
Mortgage Company 1000001____ (the “Seller”) pursuant to a separate Purchase Agreement between the Note Owner and Seller.

2. Upon information and belief, the Seller is, or was, a member of MERSCORP, Inc. (“CORP”) and these mortgage loans are registered on the MERS® System, (the “MERS Mortgage Loans”),
such that the mortgagee of record under each Mortgage is identified as Mortgage Electronic Registration Systems, Inc. (“MERS”).

3. Upon information and belief, the Seller is no longer a member or in a position to initiate the necessary transactions on the MERS® System, but is currently reflected on the MERS® System
as the servicer and/or investor of such MERS Mortgage Loan. The Note Owner needs the assistance of MERS Corporate to initiate the transaction(s) on the MERS® System to show a
transfer from the Seller to the Note Owner of said servicing rights and/or promissory note ownership interests.

4. Note Owner hereby requests CORP and/or MERS to change the MERS® System to reflect the following for 1 registered loans:

MERS Product Performance 1000050 in the servicer field,

MERS Product Performance 1000050 in the investor field

N/A in the sub-servicer field (if applicable).

The servicing agent is responsible for payment of any and all unpaid transaction fees incurred on the MERS® System related to Registered Mortgages listed on Exhibit A, including but not
limited to unpaid registration fees previously incurred. However, if the servicing agent refuses to pay, Note Owner shall pay the fees. Effective January 1, 2008, outstanding transaction
fees shall include an administrative service charge of $10.00 per each Registered Mortgage included in Exhibit A.

5. The Note Owner agrees to indemnify and hold CORP and MERS and their respective officers, directors, employees and agents harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements, including reasonable attorneys’ fees, that CORP or MERS may sustain arising out of the requests made by
the Note Owner regarding the MERS Mortgage Loan.

6. CORP and/or MERS may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed herein by the Note Owner, upon any request, instruction,
certificate or other document furnished to CORP and/or MERS by the Note Owner, reasonably believed by the CORP to be genuine and to have been signed or presented by the proper
party or parties and conforming to the requirements of this Certificate.

7. If CORP and/or MERS shall receive instructions regarding the registration of the MERS Mortgage Loan from any other person who claims to hold any pledge, lien, security interest or other
charge, encumbrance right or interest with respect to the MERS Mortgage Loan, MERS will preserve the status quo by holding the mortgage lien securing the MERS Mortgage Loan until
MERS receives written notice of declaration by a court or other governmental authority of competent jurisdiction as to who is the lawful holder of the MERS Mortgage Loan, and from and
after that time, CORP and/or MERS will follow said lawful holder’s or its designee’s instructions.

8. Note that when you change the Investor, a Mortgage Loan Transfer Notice showing that organization as the New Investor will be sent to the Primary Borrower for each affected loan
unless that Org ID has opted out of the MERS® InvestorID. This Notice is generated to comply with the requirements set forth in The Helping Families Save Their Homes Act of 2009 to
notify the Borrower in writing of the transfer of ownership within thirty days of the transfer. As the New Investor, that organization will be invoiced for the notices.
 What if I’m not named as servicer
but should be?
 Cannot sign documents on behalf of MINs (e.g., lien
releases)
 Potentially incur additional fees
– $95 external research fee (refer to MERS
Announcement 2008-08 for more information)
– Certificate processing fees
 Delays in service of process delivery
 What happens if...

…we are
…we don’t
slow with
transfer?
transfers?