Rise of the Rentals

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12 | Th e M Rep o RT M // When you joined the company in 2011, MERS seemed to be facing uphill battles on several fronts. What appealed to you about taking on the challenge? BeckMann // First, I'm excited by the MERS business proposi- tion—there is a lot of value here. MERS is the mortgage industry's utility. We provide e-commerce and other technological solu- tions for the mortgage industry today—and for the future. Second, I love a challenge and believed I could meaningfully contribute to implementing the changes required to enhance MERS' image and capabilities. Finally, MERS is supported by an incredible board, including executives from MBA, Fannie Mae, Freddie Mac, Bank of America, Citigroup, Chase, ALTA, First American, and others. M // Many of our readers are somewhat familiar with the MERS System, but in layman's terms, please tell us why MERS was created by the mortgage industry? Is your mission still the same as it has always been? BeckMann // MERS was created to eliminate the need for certain assignments, reduce the opportunity for errors in a manual paper-based recording process, and lower industry costs. The MERS System was created to track ownership and servicing rights. MERS is highly successful, with more than 90 percent of the top 100 originators and servicers using MERS and a 65 percent market share of new mortgage originations. More than 5,000 lenders, servicers, subservicers, vendors, mortgage investors, and government entities are MERS members. There are currently more than 26 million active loans on the MERS System. Our future lies in electronic mortgages, where MERS is part of the system of record for e-notes and facilitates secure delivery between investors and sellers. M // As a practical matter, how has MERS' business changed since the foreclosure crisis jolted the industry? How have your members been impacted? BeckMann // MERS' core business of acting as mortgagee on behalf of the investor and its suc- cessor and assigns has not changed. We made two important changes in response to the environment. Since 2011, MERS' members are no longer permitted to foreclose in our name—all mortgages must be as- signed and recorded in the servicer's name prior to initiation of foreclo- sure. Additionally, we increased borrower transparency by provid- ing free access to current investor and servicer information. We also enhanced our internal operations and governance and implemented a tougher quality assurance regi- men for MERS members to help ensure the accuracy and integrity of MERS System information. M // Consumers' desire for technology is revolutionizing the financial services industry. How do you see e-mortgages and other innovations impacting MERS and the mortgage industry? BeckMann // Fundamental industry changes will drive Focused on the Future MeRS products have become an integral part of the origination process in today's housing industry, despite a long spate of litigious activity. The company has been victorious in the actions filed against them and sits poised to make a significant impact in the way loans are originated in the future. Bill Beckmann, president and Ceo of MeRSCoRp holdings took a minute to discuss where he sees MeRS heading. take 5 "I am excited about the future. Despite the recent decline in originations, we are living in exciting times." adoption of more data, standards, and e-mortgages in the mar- ket. Today, the consequences of originating a flawed mortgage—re- purchase, litigation, and regula- tory risk—are severe. Yet there are thousands of pages of regulation, hundreds of individual process steps, and dozens of third-party inputs required to originate a single mortgage. Originating the "perfect mortgage" requires more data and less human touch, from application through electronic HUD1s/final disclosure forms to the e-note. E-commerce makes it pos- sible to eliminate paper from the process, improve efficiency, and automate the quality assurance process resulting in better, lower- cost mortgages. MERS eRegistry is essential in the e-mortgage world. It saves money and pre- vents confusion about who owns the e-note. Today, lenders are clos- ing e-notes and selling them into the secondary market through the MERS eRegistry. We've registered more than 300,000 e-notes so far. Fannie Mae and Freddie Mac require that lenders use the MERS eRegistry when they buy e-notes. Acting as a utility uniquely po- sitions us to bring the industry's best thinkers together to develop products and services that take advantage of new technologies. M // What inspires you about the mortgage industry's outlook? BeckMann // I am excited about the future. Despite the recent de- cline in originations, we are living in exciting times. The mortgage industry has tightened up its pro- cesses and is addressing the con- cerns of regulators and advocates. GSE reform is on the horizon, with far-reaching implications. Consumer demand for real-time solutions and industry demand for the "perfect mortgage" will drive technology and standards devel- opment. The industry emerges from the crisis stronger and more efficient and more focused on serving homeowners. MERS, acting as the industry's utility, is positioned at the core of opportunity.

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