MERS Prepares To Track Commercial Loans.

A joint initiative of the Mortgage Bankers Association (MBA) and the Commercial Mortgage Securities Association (CMSA) working toward the implementation of the Mortgage Electronic Registry System (MERS) for the commercial mortgage sector has received its first monetary contribution.

Tahir Naseem, senior specialist, commercial/multifamily group, MBA, said that the MERS initiative - which is akin to the MERS initiative on the residential side - would allow originators to register Commercial Mortgage-Backed Securities (CMBS) loans with the MERS registry and would "eliminate the need to do any assignments into the trust subsequent to that."

While the $50,000 investment from New York-based Bear Stearns is a start, the initiative still needs to attract nine other investors to commit $50,000 each, for a total investment of $500,000.

A joint MERS working group, comprised of MBA and CMSA members - as well as representatives of other CMBS industry participants such as rating agencies, issuers, law firms, trustees, servicers and special servicers - was put together in March to work on the initiative.

Mr. Naseem said, "We are looking for participants in the working group, in particular the issuers and originators of loans, to fund the $500,000 as an investment. They would get their return within two to three years in a discounted way whereby their loans' registration fees would be discounted.

"The working group leadership is currently working to get other issuers from major Wall Street companies on board to invest. But we do have our first company which we are very happy about."

Among the benefits of such a system would be the elimination of assignments, which would do away with extra documents in the commercial mortgage industry and "help streamline the process and procedures in the industry."