1. The MERS ® eRegistry: Paving the way for eNotes and eMortgages Dan McLaughlin, EVP, Product Division Presentation for: America’s Community Bankers

2. Why the MERS ® eRegistry? The industry’s response to the requirements imposed by legislation in UETA and E-SIGN The central location to identify the current Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote

3. UETA and E-SIGN Concept of “possession” supplemented by the concept of “control” over an electronic record Single, unique version of the electronic record “Authoritative Copy” must be established Safe harbor provision – criteria establishing the identity of the Controller and the Location of the Authoritative Copy

4. Definitions Paper WorldElectronic World Negotiable InstrumentTransferable Record (“eNote”) PossessionControl Original Note (wet signature)Authoritative Copy of eNote Investor/HolderController CustodianLocation (eVault) Endorsement and DeliveryTransfer of Control Holder in due courseTransferable Record Audit trail ServicerController’s Delegatee

5. Rationale Strategic imperative for MERS Will be required by participating investors Logical extension of the MERS mission and expertise Potential additional revenue for MERS Endorsed by MBA Supported by Covington & Burling legal opinion

6. Key Assumptions Industry investors will require eNote registration eNote must refer specifically to the MERS ® eRegistry Participants must be members of MERS Registry does not store eNotes Multiple eVaults will be created to store eNotes Funding of loans occurs outside the Registry

7. What’s Different? Create an eNote in SMART Doc format Execute eNote with digital signatures Store eNote in compliant eVault Deliver eNote to investor Transfer eNote from one eVault to another Service eNote Interface with MERS ® eRegistry to record these steps

8. Service Ordering: Credit Appraisal Flood Hazard Title MI Origination & Underwriting eNote Disclosure Doc Prep eNote Review Closing eSigning eClosing Platform Secondary Investor, Aggregator eNote Delivery MERS ® eRegistry Recording Doc Custody eVault Doc Custody eVault Servicing eNote Flag eNotes in the Mortgage Process External Docs eNote eNote Registration eNote Transfers Payoffs, Foreclosures, etc.

9. Milestones MBA published high level business requirements MERS announced intent to build registry MERS published detailed business requirements Development Advisory Team convenes User Acceptance testing begins Registry in production 1 st Advantage Mortgage & DPS register first eNote Member/vendor integration Mar 03 Oct 03 Nov 03 Mar 04 Apr 04 Jul 04 Ongoing

10. Primary Requirements Leverages existing standards – MERS Org. ID Number is unique entity identifier Member functionality tailored to role on Registry Authentication and security routines MERS MIN is unique loan identifier – eNote hash value enhances integrity – Cross referencing information (Borrower Name, SSN, Property Address)

11. Process Flow

12. Implementation Considerations To originate and register loans on the MERS ® eRegistry you must: – Close loans on eNotes (using MISMO standard SMART Documents) containing eRegistry language and a MIN – Connect to the eRegistry through a VPN or Frame Relay connection – Send XML transactions signed by a digital certificate provided to you from a SISAC-accredited issuing authority

13. Questions? This presentation is available from the MERS Web Site (WWW.MERSINC.ORG) under “Downloads\Presentations” (WWW.MERSINC.ORG) under “Downloads\Presentations”