MERS System Release 20 Bulletin

Effective September 6, 2011

Release 20 Bulletin
Effective September 6, 2011

The MERS System is being enhanced effective September 6, 2011. Existing batch interfaces that you or your technology provider may have installed will continue to function properly, but you must use the new file layouts to take advantage of the enhanced functionality. Some report file layouts have changed. The following pages describe the enhancements included in Release 20, and how they may affect your organization. For details about how this release may affect external systems that interface with the MERS System, see the Release 20.0 External System Impact Analysis Document (ESIAD). Version 4.0.0 of the XML Inquiry Request and Response DTDs is no longer supported as of this release. All XML Request and Response DTDs for the MERS System are included in a single compressed file, the Release 20 DTD ZIP File. You can download the release documents, and all other MERS documentation, from our website at www.mersinc.org. If you have any questions about this release, please contact the MERS Help Desk at (888) 680-6377.

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MERS System Release 20 Bulletin

Effective September 6, 2011

CR69451
MERS System allows a deactivation transaction referred to as Transfer to Non-MERS Member. Changing the name of the Transfer to Non-MERS Member deactivation transaction title clarifies the purpose of the transaction, which is to indicate that the loan does not name Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee and will not be tracked on the MERS System going forward. The system modifications to support this initiative are: Rename any label or description of Transfer to Non-MERS Member or Transfer to Non-MERS Servicer to Transfer to Non-MERS Status in MERS OnLine, MERS System Reports, MERS Link and documentation. XML Inquiry Request and Response DTDs - New 6.0.0 version o Responses provide Transfer to Non-MERS Status instead of Transfer to Non-MERS Member in the MINStatusType attributes enumerated list. XML Inquiry Request and Response DTDs - Existing 5.0.0 version o Support continues with no changes in the MINStatusType attributes enumerated list. Version 4.0.0 of the XML Inquiry Request and Response DTDs is no longer supported as of Release 20.0.

Re-Title the Transfer to Non-MERS Member Transaction and Status

Implementation and Procedural Considerations Members using MERS_Residential_Inquiry_Request_v4_0_0.dtd must migrate to a later version. If Members have processes or procedural documentation that refers to Transfer to Non-MERS Member they will need to update it to refer to Transfer to Non-MERS Status. This transaction may be used to deactivate a loan record on the MERS System when the loan is assigned from MERS to the Servicer for default purposes.

CR69604
Add Pre-Closing Registrations to RH and RI Reports
Loans with a Pre-Closing MIN Status are now included in the RH and RI reports in addition to active loans. This allows Members to identify possible duplicate loans in either Active or Pre-Closing Status and contact the Servicer or Subservicer of the associated MIN to ensure two first liens are not originated for the same borrower and property combination. MINs for the Same Primary Borrower, SSN, Property and First Lien Mandatory Daily (Report ID RH) o Lists the Active and Pre-Closing MINs registered or updated in the previous processing cycle that have the same current primary borrower, property, and first lien information. o MINs with a Pre-Closing Status are listed first on the report. MINs for the Same Primary Borrower, SSN, Property and First Lien Optional Monthly (Report ID RI) o Lists Active and Pre-Closing MINs that have the same current primary borrower, property, and lien information. This report is created on the last Saturday of each month and is cumulative. MINs continue to appear on this report until the borrower, property, or lien information is updated. o The primary sort of the RI report by Address has not changed. The secondary sort (within Address) is by MIN Status, with Pre-Closing MINs displayed before Active MINs.

Status information for MIN1 and MIN2 has been added to the pdf and txt versions of the RH and RI reports. The Consolidated Report Data File (Report ID OD) has been updated to include MIN2 status information for the RH report. MIN1 status information is already defined in the OD data file from other reports. Implementation and Procedural Considerations Members using the reports may need to revise their internal procedures due to the inclusion of MINs in Pre-Closing Status.

CR72482 Remove Foreclosure Pending (Option 2) Transaction

As of July 22, 2011, Membership Rule 8 requires an assignment out of Mortgage Electronic Registration Systems, Inc. (MERS) before commencement of foreclosure proceedings on MOM and Non-MOM loans, making the Foreclosure Pending (option 2), retained on MERS transaction obsolete. Therefore this transaction has been removed.

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MERS System Release 20 Bulletin

Effective September 6, 2011

The modifications associated with this change are as follows: No new Foreclosure Pending (option 2) transactions are allowed in either MERS OnLine or batch. MINs already in Foreclosure Pending (option 2) status may continue to be updated to Foreclosure Complete, Reinstated/Modified (option 2), Foreclosure Status Reset, or Foreclosure Pending (option 1), assigned to Servicer. MINs in Reinstated/Modified (option 2) status may be updated to Foreclosure Pending (option 1), assigned to Servicer or Foreclosure Status Reset. MINs in Foreclosure Complete status that were previously in a Foreclosure Pending (option 2) status are allowed a Foreclosure Complete Deactivation Reversal in order for Members to correct errors. A MERS eRegistry charged off transaction that cascades to MERS System no longer creates a Foreclosure Pending, Option 2 eReg milestone record. Only the Foreclosure Complete transaction is created during the cascade process. The report New Foreclosure Option Two Status (Report ID DH) has been retired. The Past Due Foreclosure Terminations (Report ID DI) has been modified to a report frequency of the last Saturday of the month. Implementation and Procedural Considerations Members that initiate foreclosure proceedings on MOM and Non-MOM loans will have to assign the loan out of MERS name and use Foreclosure Pending Option 1 (assigned to Servicer) in keeping with Rule 8.

Modifications Due to Quality Assurance Procedure Changes

MERSCORP has revised its policies and procedures concerning Quality Assurance. Release 20.0 contains the first phase of system modifications to support these changes; a second phase of modifications is planned for a later MERS System release.

CR71429 Remove and Update MIN Data Phase 1

A number of MIN level fields are no longer needed for quality assurance, including: Assignment Recording Information Assignment Sent Date Borrower Title Broker SSN Estimated Funding Amount Estimated Funding Date Lien Release Sent Date Metes & Bounds Indicator Modification Recording Information Original Mortgagee QR Indicator Security Instrument Recording Information Security Instrument Type Torrens Certificate Number Trustee

To accommodate the removal of these fields: With the exception of the QR Indicator, the data previously stored in these fields has been removed from the system. An audit record documents the removal of the information. The capability for a Member to add, update or delete data from these fields has been removed in both MERS OnLine and batch interfaces. No batch file layouts have changed, but any data submitted in these fields will be ignored. If a Registration batch file group for Security Instrument Recording (Group III), Assignment Recording (Group IVb) or Modification Recording (Group IXb) is included in a batch file, the data is ignored and a warning message is included on the Members Rejects & Warnings Report. In MERS OnLine, the data fields have been removed from the Web pages, and Transaction Default Settings for Registration no longer includes Security Instrument Type. In MERS Link, the deprecated data fields are not being removed, but do not contain any data. For example, the Recording Information field labels continue to display, but no recording data displays. Implementation and Procedural Considerations Members may need to review their internal procedures and internal training material to no longer collect and submit the impacted data. Since no fields are being removed from the file layouts and DTDs, Members using batch and XML can transition to the revised data requirements at their convenience. However, by Phase 2 of this project Members will not be able to submit any batch transaction with recording information.

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MERS System Release 20 Bulletin

Effective September 6, 2011

Summary of Fields Removed in MERS System Release 20

Field(s) OnLine Batch
Field ignored in: Registration Update Re-Registration Reactivation Field ignored in: Registration Update Re-Registration Reactivation Field ignored in: Registration Update Re-Registration Reactivation SI RI (Group III) ignored in: Registration Update Re-Registration Reactivation Warning 907 returned Field ignored in: Registration Update Re-Registration Reactivation PIF Deactivation

XML
Field ignored in: Prelim Reg XML Reg

MIN Audit Record For Removal

Included in Audit Group Security Instrument Data Update Included in Audit Group Security Instrument Data Update Included in Audit Group Security Instrument Data Update Included in Audit Group Security Recordation Removal

Security Instrument Information Removed from: Original Mortgagee Registration Add/Update/View SI Re-Registration Reactivation Removed from: Security Instrument Registration Type Add/Update/View SI Re-Registration Reactivation Removed from: Trustee Registration Add/Update/View SI Re-Registration Reactivation SI Recordations Removed from: (Number, Book, Registration Page, Date, Add/Update/View SI Type) Re-Registration

Field ignored in: Prelim Reg XML Reg

Field ignored in: Prelim Reg XML Reg

N/A

Lien Release Sent Date

Removed from: Update SI PIF Deactivation

N/A

Included in Audit Group Security Instrument Data Update

Assignment Information (Note Assignee & Assignor Fields remain) Removed from: Field ignored in: Assignment Sent Date Registration Registration Assignment List Update Add/Update Assignment Re-Registration Removed from: Assignment RI (Group Assignment IVB) ignored in: Recordations Registration (Number, Book, Registration Add/Update Assignment Page, Date, Update Re-Registration Type) Warning 907 returned Quality Assurance Information Removed from: QR Indicator Registration Add/Update/View SI Assignment List Add/Update Assignment Re-Registration Foreclosure Deactivation Reversal MIN Summary TOS/TOB MIN Summary Field ignored in: Registration Update Deactivation Deactivation Reversal Foreclosure Reinstated or Modified, Option 2 Foreclosure Status Reset

Field ignored in: Prelim Reg XML Reg

Individual audit record for Assignment Sent Date Included in Audit Group Assignment Recordation Removal

N/A

N/A

No removal or changes of QR Indicator were performed

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MERS System Release 20 Bulletin

Field(s) OnLine
None

Effective September 6, 2011

Batch XML
Field ignored in: Prelim Reg

MIN Audit Record For Removal

Included in Audit Group Miscellaneous Data Update Included in Audit Group Miscellaneous Data Update Record created for the removal of any value other than 0.00. Removal of 0.00 values, the fields default value, will not be audited. Included in Audit Group Miscellaneous Data Update Included in Audit Group Miscellaneous Data Update

Miscellaneous Information Removed from: Estimated Funding Date Registration Update Misc Re-Registration Removed from: Estimated Funding Registration Amount Update Misc Re-Registration

None

Field ignored in: Prelim Reg

Broker SSN

Removed from: Registration Update Misc Re-Registration Removed from: Registration Update Misc Re-Registration

Field ignored in: Registration Update

Field ignored in: Prelim Reg

Torrens Certification Number

Field ignored in: Registration Update

Field ignored in: Prelim Reg

Borrower Information Removed from: Borrower Title Registration Add/Update Borrower Assumption Re-Registration Legal Description Information Removed from: Metes & Bounds Registration Indicator Add/Update Legal Description Re-Registration

Field ignored in: Registration Update Assumption

Field ignored in: Prelim Reg XML Reg

Individual audit record for Borrower Title

Field ignored in: Registration Update

Field ignored in: Prelim Reg XML Reg

Included in Audit Group Miscellaneous Data Update Record created for the removal of each Y value. Removal of N values, the fields default value, will not be audited. Included in Audit Group Modification Recordation Removal

Modification Information (Note Modification Agreement Note Date and Note Amount remain) Fields removed from: Modification RI (Group N/A Modification 9b) ignored in: Recordations Registration (Number, Book, Add/Update Modification Registration Page, Date, Update Re-Registration Type) Warning 907 returned

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MERS System Release 20 Bulletin

Effective September 6, 2011

CR72130 Turn Off Retired Reports

MERS System reports that primarily focus on security instruments, recording information and selected other Quality Assurance processes are no longer produced, including: Assignments and Lien Releases Not Quality Reviewed (Report ID DB) Assignments and Lien Releases (Report ID DC) Registration Assignments Without Recording Information (Report ID QB) Deactivation Assignments Without Recording Information (Report ID QD) Security Instruments Without Recording Information (Report ID QF) Lien Release Not Sent For Members (Report ID QJ) On-Request Missing Security Instrument Recording (Report ID QY) On-Request Missing Assignment Recording (Report ID QZ) Registered MINs with Quality Review of No (Report RC) Security Instrument Trend (Report ID QG) Security Instrument Reconciliation (Report ID QL) Registration Assignments Not Sent (Report ID QA) Deactivation Assignments Not Sent (Report ID QC) In addition, the MERS OnLine page used to request the QY and QZ reports is no longer available.

CR73113 Funding Date Field Management

A Member enters the Funding Date at registration, and it is used for validation of registration timeline compliance. Because the Funding Date is no longer used for reconciliation purposes, with this release the data is automatically removed from this field sixty days after registration. To accommodate the removal of data in the Funding Date field: An implementation process removing the data currently stored in this field on MINs meeting the selection criteria provides an audit record to document the removal of the information. A weekly process will remove the data from MINs meeting the selection criteria. The update will be reported on the Members Maintenance Verification (MA) report and an audit record will document the removal of the information. The capability in on-line and batch for a Member to add, update or delete data from the Funding Date field is not being removed.

CR73347 Member Extract for Subservicer

Members are required to reconcile their data from the MERS System with the data from their own servicing system. To assist Members with reconciliation, a solution was implemented in April of this year that extracts a Servicers MIN and Member data from the MERS System database. With this enhancement, the Member Reconciliation Extract process is expanded to include MIN data where a Member is named as Servicer or Subservicer.

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MERS System Release 20 Bulletin

Effective September 6, 2011

Maintenance X12 Upgrade and Migration

The X12 translation software used by the MERS System to format Member input into the MERS System proprietary flat file format has been upgraded and migrated to a new processing platform. With this change, the EDI communications envelope editing enforces all syntax and data rules as provided in the EDI Implementation Guide. This enhanced editing applies to the communications envelope comprised of the following segments: ISA, IEA, GS, GE, ST, and SE. Implementation and Procedural Considerations Members already employing correct syntax and data rules as provided in the EDI Implementation Guide will not be impacted. Members not already employing correct syntax and data rules as provided in the EDI Implementation Guide will receive batch errors and failures unless they conform to these rules.

MERS ServicerID Modifications

MERS ServicerID is a public portal allowing the general public the capability to identify the Servicer associated to a MIN. Two modifications have been made for this release:

CR64943 Introduction of a CAPTCHA

A challenge-response test, CAPTCHA, has been added to the website to provide an additional level of security ensuring that a human and not a computer program is accessing the system. CAPTCHA is an acronym for "Completely Automated Public Turing test to tell Computers and Humans Apart." The CAPTCHA includes an image of distorted text and a form field. The user must decipher the image and repeat back the correct text into the form field before being allowed access to the main search page.

CR71426 Disclosure of Investor Name to Borrower

MERS ServicerID no longer displays Investor information according to the Display Investor Information-Public Member Option. Investor information is not displayed on the initial search results page regardless of this option. To display Investor name for a MIN returned in the initial search results, the borrower must enter their name and tax identification number and affirm they are a borrower on the loan. Investor name will then be displayed if the borrower information entered matches the information for any borrower on that loan on the MERS System. Special language is provided if the Investor is not a MERS System Member (Investor Org ID 1000002). The telephone Servicer Identification System (SIS) has not been changed.

MERS System Manuals updated for Release 20.0

In conjunction with enhancing the MERS System with Release 20.0 on September 6, 2011, the following manuals have been updated: Transitional Quality Assurance Procedures Manual Transitional Procedures Manual MERS OnLine User Guide MERS System Reports Handbook MERS System Integration Handbook Volume I Business Integration Environment MERS System Integration Handbook Volume II - Technical Integration Environment EDI Implementation Guide If you have any comments or suggestions about these materials, please contact Jaqi Hasty at jaqih@mersinc.org. This release bulletin and the manuals listed above, as well as all communications from MERSCORP, are available on our website at: www.mersinc.org.

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