MERSCORP Holdings, Inc. update for April 20, 2016

Proprietary and Confidential Who are we?  MERSCORP Holdings, Inc. (“MERSCORP”): Corporation that owns the MERS® System, an electronic registry for tracking servicing rights and ownership interests in mortgage loans. –A private corporation owned by the most significant players in the industry, including GSEs, the MBA, lenders, servicers, title and insurance companies, among others  Mortgage Electronic Registration Systems, Inc. (“MERS”): Subsidiary of MERSCORP; its sole purpose is to serve as mortgagee in land records for loans registered on the MERS® System (residential loans).

Why was the MERS® System created?  The MERS® System was created by the real estate finance industry to streamline the mortgage process by using electronic commerce to eliminate both paper and redundant processes  Other products include the MERS® eRegistry, a system of record for registered eNotes that identifies the owner (Controller) and custodian (Location) of each eNote, providing greater liquidity and transferability with lower costs

Proprietary and Confidential Who uses MERS and the MERS® System?  More than 5,000 lenders, servicers, subservicers, vendors, mortgage investors and government entities are MERS® System Members (“Members”) –More than 93 million loans have been registered on the MERS® System since 1997 –Approximately 27 million active mortgage loans are registered on the MERS® System today – roughly 70 percent market share  All legal correspondence received by MERSCORP is forwarded to the registered servicer or subservicer, who then processes it on behalf of the investor

Proprietary and Confidential Benefits of the MERS® System  Increases efficiency in sale of loans and servicing transfers in secondary mortgage market  Eliminates breaks in the chain of title  Savings for homeowners and lenders on each loan  Provides Information –Identity of servicer available for free to homeowners and title industry via telephone or online –Used by lenders to detect fraud (e.g., find undisclosed liens)

Proprietary and Confidential Membership  General Member ($500 to $7,500 annual) –Servicers typically  Lite Members ($264 annual) –Sell servicing on a flow basis within 30 days from note date Visit and click on “Join MERS to begin thewww.mersinc.org process to submit your online application for membership.

Proprietary and Confidential How does it work?  Every lender generates their own MIN (Mortgage Identification Number) for each loan. –18-digit unique number printed on each security instrument prior to closing  The security instrument names MERS as mortgagee and nominee for the lender and its successors and assigns.  MERS serves as mortgagee in the county land records for MERS members. –When servicing transfers from one MERS member to another, no assignment is needed because MERS continues to serve as the mortgagee.

Proprietary and Confidential How does it work? (cont’d)  Members register loans on the MERS ® System and then report transfers of beneficial and servicing interests as they occur.  MERS receives service of process and electronically forwards documents to the current servicer on the MERS ® System.  Members release liens and assign loans out of MERS through our corporate resolution naming their officers as MERS Signing Officers.

Proprietary and Confidential MERS as Original Mortgagee Sample “MOM” Language appearing on the security instrument: MERS (“Mortgage Electronic Registration Systems, Inc.”) is a separate corporation that is acting solely as nominee for Lender and Lender’s successors and assigns. MERS is the Mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI , Tel, MERS.

Proprietary and Confidential Registration  All MERS loans need to be registered on the MERS® System.  Methods of registration: –MERS ® OnLine –Interfaces from your LOS –Servicing system

Welcome Screen

If your loan was registered successfully, you’ll receive this message Registration Successful If required fields weren’t completed, the system won’t process the transaction

Proprietary and Confidential MERS® Fraud Tools

Proprietary and Confidential Fraud Detection Tools  For Members: MERS® System (MERS® OnLine) –MIN Information – MIN Find –RH and RI Reports –XML Inquiry Transaction –Batch Inquiry Input File Format –MERS® Link  For general public: –MERS® Link: subscription-based –MERS® ServicerID: free, web-based

The MERS ® eRegistry

Proprietary and Confidential Paper World  Negotiable Instrument  Original Note  Possession  Holder  Custodian  Endorsement and Delivery  Chain of Endorsements  Wet Signature Combining Yesterday’s Processes with Today’s Technologies Electronic World Transferable Record (“eNote”) Authoritative Copy of eNote Control Controller Electronic Vault Transfer of Control Transferable Record Audit trail Electronic Signature

Proprietary and Confidential Today: The Hybrid Mortgage  Typically electronic –Disclosures –Application –Credit Report –Appraisal –Flood Determination  Typically paper –Promissory Note –Security Instrument –Title Policy

Proprietary and Confidential Definition: eMortgage  “A mortgage where the critical loan documentation, specifically the promissory note, is created electronically, executed electronically, transferred electronically, and ultimately stored electronically.” -MISMO

Proprietary and Confidential Why MERS® eRegistry?  Industry’s response to adoption of electronic signature, delivery and movement of transferrable records  The national registry to identify the current Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote  The MERS® eRegistry is essential and on of multiple functions used by Participants in the eMortgage world –Saves money and identifies who holds the eNote  Enables transferability of eNotes in the secondary market  More than 335,000 eNotes registered  Incorporates MISMO standsards

Proprietary and Confidential Why MERS® eDelivery  Standardized secure delivery of electronic documents from one Member to another  Participants use existing interface to the MERS ® eRegistry –Eliminates multiple B2B custom interfaces  Incorporates MISMO standards of the MERS ® eRegistry

Proprietary and Confidential Legislation Paves the Way for eSignatures  Uniform Electronic Transaction Act (UETA) –Developed in 1999 –Adopted in every state (except IL, NY and WA), the District of Columbia and the Virgin Islands  Electronic Signatures in Global and National Commerce Act (ESIGN) –Enacted into federal law in 2000 –Controlling law in states, territories where UETA has not been adopted  MERS® eRegistry designed to satisfy the control requirements of UETA and ESIGN

Proprietary and Confidential Key Assumptions  Industry investors will require eNote registration –Fannie Mae and Freddie Mac mandate use of the MERS® eRegistry when eNotes are sold to them  eNote must refer specifically MERSCORP Holdings, Inc as the operator of the registry  MERS® eRegistry participants must be MERS® System Members  MERS® eRegistry does not store eNotes –Multiple eVaults have been created by MERS® eRegistry users to store eNotes  Funding of loans occurs outside the MERS® eRegistry

Proprietary and Confidential State of “e” in the Industry  eDisclosure adoption rate is rapid due to compliance risk and relative ease of implementation  eRecording is growing, but limited by lack of standards, and is primarily image-based solutions (mostly images and PDFs, not data) –Total of 1,284 Counties throughout the entire USA covering 70% of US population –The states where all counties permit eRecording: Alaska, Arizona, Colorado, Hawaii, Delaware, Iowa and Massachusetts –Warehouse Lenders are stepping up and asking questions and getting informed

Proprietary and Confidential We are here to help!  Resources available: –Regional Sales Directors –Business Integration Managers –Members-only website (members.mersinc.org) –Annual User Conference –Help Desk:  (888) 

Proprietary and Confidential Questions? More information is available from the MERS Web Site