This is a question from many borrower’s who at one point took out a mortgage. This is a question that many recorders can not answer today. This is a question that can cause many claims without paying appropriate attention. At the same time, this is a question that only a few in the title industry are privileged to know the answer to. If you are a homeowner trying to find out why you are paying your mortgage to someone who is called as Servicers of your loan, it may cost you $100,000.00 yearly subscription and plenty of training to answer this question yourself.

Servicers operate per rules and guidelines defined by a document called Pooling and Servicing Agreement filed with SEC during formation of the securitized trust. One of the biggest problems with todays’ title work is a lack of understanding of securitization process and no connection of SEC filed document with mortgage related documents at the recorder’s office. In many cases, the mortgage is assigned into a servicer from the original lender per public records, while servicer never pays a dime for a note ( or a mortgage ) and only gets legal rights to initiate a foreclosure or execute a deed in lieu. The assignment of mortgage in fact hides the details of transaction (patches the chain of assignments) and makes the title clouded from the perspective of the mortgage transactions from origination to time of mortgage assignment.

Most of the assignments are from MERS serving solely as nominee for lenders to a servicers or trustees, but at the same time MERS is a shell system to track mortgages stating that it never owns a mortgage. MERS is supposed to be a transparent system to track all mortgage transactions but MERS is a first link in broken securitization system. MERS was formed to track the mortgage transfers and report the transactions to all interested parties, which is a great idea in theory. However, if the borrower tries to find out where the loan is under MERS tracking system by entering the name, address and SSN, the MERS Report will not give you much. You may get a report stating who servicer is, but not where the loan is securitized and any other related information on the transactions, especially the place where to find pooling and servicing agreement. The trustee, underwriter or issuer information is typically hidden within MERS, by stating that the information was hidden by request of the lender. Therefore, MERS system is only tracking and reporting for lender and not borrower. This is one item that certainly should be changed going forward and brought up to the attention of Consumer Financial Protection Bureau. Once the link between recorded mortgage and SEC is established, borrower may get access to all SEC based bi-laws, guidelines and servicing agreements for their specific mortgage. There will be no issues with mis- trusting the servicer collecting payments or trustee foreclosing on the property. At the same time, this approaches would force the originator disclose all of the information for the borrower, as well as, how to find it. If the loan is not acquired into the trust at the time or origination, borrower should be notified that there will be a letter from lender notifying where the loan is securitized and who the parties of the transaction are.

ProTitleUSA has an engine for securitization searching today, it’s not perfect, but it works for 90% of the loans, where we can state which trust the loan is securitized. We can help to get the information on each individual loan and pull all securitization documents. This is important for due-diligence work on the foreclosure and  foreclosure defense.