It will then track servicing rights and beneficial ownership interests in those loans and provide a platform for mortgage servicing rights to be traded electronically among its members without the need to record a mortgage assignment in the public land records each time. MERS is a Delaware nonstock corporation owned by its members, who, in most cases, are also its users. Members pay annual fees to belong and transaction fees to execute electronic transactions on the MERS System. Members control the company through a board of directors, which is empowered to set rules, fees, and penalties for operating the System. The MERS System is a secure network.
Access levels depend on a member's relationship to a particular mortgage loan.
The software is Windows-based and designed to run on a 386 computer. At present, the MERS System is limited to single-family first mortgage loans. A mortgage note holder can sell a mortgage note to another in what has become a gigantic secondary market. The negotiability of notes under the UCC is the foundation for the secondary market for mortgage loans. As investors bought more and more loans in the secondary market, many of them contracted with servicing companies to handle loan servicing obligations.