Mortgage Electronic Registration Systems, or MERS, is a privately held company created in 1995 by the mortgage banking industry to simplify the process of tracking mortgages throughout their lifetimes. For homeowners with a mortgage, the services provided by MERS can make it easier to track who services and owns your mortgage, which can be important information.
How the system works
MERS has a system called ServicerID that allows individual homeowners to determine the servicer and owner of their mortgage.
The system uses a unique 18-digit number, known as a Mortgage Identification Number, or MIN, that is assigned to each loan and used to track the loan throughout its life -- from closing to payoff. Borrowers can find their MIN on the deed of trust signed at closing, or elsewhere on their mortgage paperwork.
Homeowners can access the system by phone or online, and can search for their mortgage in one of three ways. The easiest way is to simply enter the MIN itself. Or, if you don't have this, then you can enter your home's address or, alternatively, your name and Social Security number.
Why is it important?
By far the more important of the two parties you can identify using MERS is the servicer of your mortgage. There are some good reasons to always keep track of your servicer.
- Your servicer is responsible for collecting your mortgage payment each month. Since your servicer could change several times over the life of the loan, it's important to always send your payment to the right place. This can help you avoid late fees, as well as fraud attempts.
- If you need information such as your payoff amount or details about your property taxes or hazard insurance, you need to contact your mortgage servicer.
- If you can't make your mortgage payments, you can only negotiate the terms of the loan with your servicer -- not with the investor or owner of the loan. And if your loan falls into foreclosure, the servicer supervises the process.
In general, most homeowners don't need to be too concerned with the owner of their mortgage, since most correspondence is done through the servicer. If you are in foreclosure, knowing who owns your loan could help with your defense, but for most purposes this information isn't terribly important.
Do you know who your mortgage servicer is?
Chances are you know who your current mortgage servicer is, since this entity sends you the bill each month. It might be a big bank such as Wells Fargo, or it could be a mortgage servicing company.
However, just because you've identified your current mortgage servicer doesn't mean it will still be the same company next year, or even next month. Mortgage servicing rights are transferred frequently, and having access to the MERS system can let you know how to contact your new servicer if this happens to your loan. Also, if you receive a letter from a supposed servicer that says "start sending your payment to us," the MERS system can help to confirm its legitimacy.
In short, while you don't need to check it every day, the MERS system can be a useful tool for homeowners to know about and use if/when the need arises.