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MERS-RK Arnold Testimony-HouseFinSvcsComm_11 18 2010_COMPLETE

MERS-RK Arnold Testimony-HouseFinSvcsComm_11 18 2010_COMPLETE

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Published by Tim Bryant
Remarks & Testimony of MERSCORP CEO, R.K. Arnold, in front of the House of Representatives Financial Services Committee, Subcommittee on Housing & Community Development. November 18, 2010.
Remarks & Testimony of MERSCORP CEO, R.K. Arnold, in front of the House of Representatives Financial Services Committee, Subcommittee on Housing & Community Development. November 18, 2010.

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Categories:Business/Law
Published by: Tim Bryant on Apr 22, 2013
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Testimony of Mr. R.K. Arnold, 11/18/2010Subcommittee on Housing and Community Opportunity
Remarks of R.K. ArnoldPresident and CEO of MERSCORP, Inc.Before theSubcommittee on Housing and Community OpportunityHouse Financial Services CommitteeNovember 18, 2010
Chairman Waters, Ranking Member Capito and members of the Subcommittee, myname is R.K. Arnold. I am President and CEO of MERSCORP, Inc. Thank you for this opportunityto appear today.MERS is a member-based organization made up of about 3,000 mortgage lenders. Itmaintains a nationwide database that tracks changes in servicing rights and ownership interestsin mortgage loans. Today MERS is keeping track of 31 million active loans.The MERS database is important to the mortgage industry because it is the onlycentralized registry in the industry that uniquely identifies each mortgage loan.The MERS database is important to individual borrowers because it provides a free andaccessible resource where borrowers can locate their servicers, and in many cases, learn whotheir note-owner is as they change over time.The MERS database is important to communities because housing code enforcementofficers use it to identify who is responsible for maintaining vacant properties.The MERS database aids law enforcement in the detection of mortgage fraud bytracking liens taken out utilizing the same borrower name, social security number, or property.
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Testimony of Mr. R.K. Arnold, 11/18/2010Subcommittee on Housing and Community Opportunity
MERS also performs another key function: It serves as the mortgagee of record, or theholder of mortgage liens, on behalf of its members as a common agent. MERS is designated asthe mortgagee in the mortgage document, and this designation is approved by the borrower atloan closing and then recorded in the appropriate local land records. Serving as the mortgageeenables MERS to receive and maintain updated information as loan servicers and noteholderschange over time because we are the central clearinghouse for receipt of mail as mortgagee.One thing that is always clear in a mortgage document is that if the borrower defaultson his obligation, the lender can foreclose. If MERS holds the mortgage lien, foreclosures canoccur in two ways: Either the MERS mortgage interest is reassigned in the land records to thelender holding the note and the lender initiates the action on its own, or MERS initiates theaction as the mortgagee of record in the land records.To do this, MERS relies on specially designated employees of its members, calledcertifying officers, to handle the foreclosure. To be a MERS certifying officer, one must be anofficer of the member institution who is familiar with the functions to be performed, and whohas passed an examination administered by MERS. Generally, these are the same individualswho would handle the foreclosure if the lender was involved without MERS. The loan fileremains with the servicer as it did before MERS. MERS is not a repository for mortgagedocuments or promissory notes.MERS derives its revenues entirely from fees charged to its members—it makes nomoney from foreclosures. And MERS does not decide when to foreclose. Foreclosure must beauthorized by the note-owner (or noteholder), and it must be done in accordance with ourstrict rules and procedures, which we regularly enforce and refine.
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