MERS May Reduce Obstacles to E-Notes.(Mortgage Electronic Registration System )

Miami -- When Chicago-based 1st Advantage Mortgage LLC set out to do an actual e-mortgage with "the first MERS-regulated commercially reproducible eNote," recalled Paul Lueken, the company's president and owner, the event was delayed because someone at the title company "was afraid that somebody might trip over a computer wire" at closing. It was months before he got the OK to try again.

That incident, said Mr. Lueken, illustrated the difficulty of doing e-mortgages in the recent past, he told attendees of a session on e-mortgage technology and standards at the Mortgage Technology conference just concluded here.

Though his warehouse lender declined to participate, Mr. Leuken persisted in closing his first e-mortgage, he told attendees, because the e-mortgage promises to deliver a flawless closing, flawless signing of all docs, a flawless MERS registration and low-cost electronic delivery of the loan package.

Also on the panel were MERS EVP Dan McLaughlin, who briefed the audience on the MERS eRegistry, and Paul Rakowicz, president of Document Processing Systems. 1st Advantage Mortgage used Document Processing Systems' patent-pending electronic mortgage document management system to complete the two e-mortgages it has closed to date.

To originate and register loans on the MERS eRegistry, said Mr. McLaughlin, a lender must close loans on e-notes using MISMO standard SMART Docs and send XML transactions signed by a digital certificate provided from a SISAC-accredited issuing authority.

In January 2004 Secure Identity Services Accreditation Corp., a nonprofit subsidiary of the Mortgage Bankers Association, announced accreditation of VeriSign Inc. as a credential service provider for the mortgage industry.

Crucial to the e-mortgage is the Public Key Infrastructure digital signature, said Mr. Rakowicz, because it identifies both "what the borrower saw and what the borrower signed in a SMART Doc." On the B2B level, PKI ...