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What You Should Know About the MERS eRegistry

We have witnessed massive changes to the mortgage industry as a result of the pandemic. Among them is the use of eNotes. By December 2020, the number of eNotes on the MERS eRegistry was up 261% from the previous December, according to MERS.

The MERS eRegistry is a requirement of using eNotes. Yet, not everybody seems to understand the MERS eRegistry—and they probably should, as eNote adoption is growing faster than ever.

When it comes to the MERS eRegistry, there’s much more than meets the eye. It’s important to understand the eRegistry doesn’t store eNotes. It identifies which copy of an eNote, in which vault, is the legally enforceable one (the authoritative copy). That means lenders need a secure eVault that interfaces with the eRegistry.

Here’s what you need to know, and how to best leverage the MERS eRegistry to your advantage.

The MERS eRegistry, in a Nutshell

The MERS eRegistry was created in 2004 with the backing of the Mortgage Bankers Association to serve as the mortgage industry’s system of record for holders of eNotes. You could call it the industry’s national eNote registry.

The launch of the eRegistry followed the passage of the Uniform Electronic Transaction Act (UETA) and the federal Electronic Signatures in Global and National Commerce Act (E-SIGN), which made electronic notes legally binding. The eRegistry satisfies control requirements of both acts when using eNotes. Basically, the eRegistry identifies the holder of an eNote and the location, or custodian, of the authoritative copy of the eNote.

Both Fannie Mae and Freddie Mac require eNotes to be registered on the MERS eRegistry before they are eligible for purchase. However, the overall number of eNotes registered on the eRegistry represents only a fraction of the overall number of mortgage notes. But that is changing.

Why Use of the eRegistry is Growing

Industry adoption of eNotes has been growing for years because they have enormous benefits for lenders, servicers and investors. For one, eNotes are much less expensive and error-prone than paper notes. They also shorten loan production timelines, improve data quality, eliminate the possibility of lost notes,  and create greater transparency for all parties involved in the loan process.

However, eNote adoption jumped substantially since the COVID-19 pandemic began, as social distancing requirements and remote work pushed more lenders toward adopting digital mortgage capabilities. As a result, the use of eNotes, and therefore the eRegistry, has grown, too.

Today, there are nearly 1.2 million eNotes on the MERS eRegistry. That number will grow as more lenders look to adopt eClosings to make the closing process faster, more efficient, and less costly.

The Role of eVault and eRegistry Services

Because the eRegistry doesn’t actually store eNotes, you’ll need a secure eVault that interfaces with the eRegistry, which means you’ll need a technology partner capable of providing one.

If you’re thinking of adopting eNotes, the company you partner with is extremely important. There are only about 10 technology providers that are currently integrated with the MERS eRegistry. SigniaDocuments is one of them. But these providers aren’t all the same.

For example, you’ll want an eVault partner with an easy-to-use eVault interface for accessing vaulted documents and initiating transactions to the eRegistry. And you’ll want to be sure your provider is GSE-certified and meets all legal and technical requirements for eVault loan file storage.

You’ll also want to have an eNote partner with years of experience creating and delivering SMART Doc eNotes, as well as a full library of loan documents in SMART Doc format—and only SigniaDocuments has all the above capabilities.

Using eNotes and registering them on the MERS eRegistry is an important step for lenders to take right now as borrowers, loan officers and trusted partners increasingly expect speed, efficiency and accuracy. With the right partner by your side, making the switch is easy.

If you have any questions about the MERS eRegistry, eVault or eNotes, give us a call at 1-877-7SIGNIA or email us at Info@SigniaDocs.com. We’re happy to help.