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Back in July, MERS sent a reminder notification to its customers about their upcoming 2019 eQA Plan responsibilities. During that same time, I penned a blog to help servicers begin those preparations in a timely and well-executed manner with their 3rd party provider. Part of that guidance recommended starting the process three to four months out from the time of submission, in order to give the reviewer time to fully attest to MERS compliance with a thorough review.
With fall upon us, many are in full swing working with their independent reviewer to complete the annual audit, as I am with our long-time and new LoanLogics clients. I thought now would be a good time to share some of the common audit findings that I have uncovered in my work in recent years and what I expect to find again this year.
These common MERS eAnnual Report audit findings include:
- Inadequately documented MERS procedures leading to misinformation and omissions as staffing changes occur
- Exceptions identified during the monthly reconciliation process are not being corrected in a timely manner
- Previous third-party vendors did not completely review all processes, procedures, and documents for MERS compliance
- MERS reject/warning reports had not been retained and aging reports were not utilized to track that errors had been corrected
- Internally generated or attorney drawn documents are not reviewed prior to execution for MERS compliance.
Of these five, MERS recordable documents are one such area that many 3rd party providers fail to review thoroughly. Documents such as lien release, assignments, modification agreements, etc. that have been prepared in-house as opposed to being purchased from a document vendor, who reps & warrants that the forms are compliant, are often overlooked but should be carefully examined. There are strict requirements for what a MERS document can and cannot say and updated requirements have been outlined in the MERS Procedures Manual v.35. Any time a company creates its own document template, it should take the necessary steps to ensure it is compliant with the MERS requirements.
For those that have not started work with their 3rd party provider yet this year there’s still time to ensure a comprehensive review. These audit findings are good areas for servicers to discuss with their partner during the review. With nearly 20 years of experience in MERS compliance, I can attest that making everyone aware of the common missteps turns them into steps forward.
*A portion of the content from this blog was extracted from a recent LoanLogics white paper, How to Get the Most from Your MERS® Annual Review. Download more insights in the full paper here.
