Due to recent case law rulings concerning the relationship of MERS with security instruments, the Federal National Mortgage Association (FNMA) announced the creation of a MERS Rider (FNMA Form 3158) which should be used in conjunction with their Montana, Oregon, and Washington uniform security instruments (see FNMA Ann. SEL-2014-03). We created this document earlier this year (Cx18587) and, since FNMA’s uniform security instruments are used in our system for VA and RD loans, this rider is printing for all except FHA types of loans (see http://www.docutechcorp.com/new-document-mortgage-electronic-registration-systems-rider-cx18587).
For the same reasons as FNMA, we will now be providing a new FHA MERS Rider (Cx19052) which will print under the following conditions:
- Base Type = FHA
- Cooperative = No
- Document Package Type = Closing
- HELOC = No
- Lien Position = First Lien
- MERS = Yes
- State Code = Montana, Oregon, and Washington
The content of this document is substantially similar to the content in FNMA Form 3158, with the following variances:
- Section B has not been included, since its provisions are substantively present in the FHA security instruments.
- Cross-references to sections in the security instrument have been revised to refer to the applicable sections in the FHA security instruments.
- The format of the language has been slightly altered, to be more consistent with FHA’s other riders and to match the language of FHA’s security instruments. For example, FHA’s security instruments for Montana, Oregon, and Washington do not contain a Definitions section, so the definitions in the rider are being added as additions to these documents, rather than replacing existing definitions, as is being done in Form 3158.
FHA Security Instruments
In addition to this new MERS Rider, we will also be editing the FHA security instruments for Montana (Cx388), Oregon (Cx399), and Washington (Cx410) in the same manner as the FNMA uniform instruments for these states were edited as previously announced; namely, adding cross-references in the instrument to the MERS Rider, referring to the lender as the beneficiary of the security instrument, and referring to MERS as the lender’s nominee.
In addition to these edits, we have also audited our “to” and “from” MERS Assignments for the three aforementioned states, to ensure that they comply with the formatting requirements of MERS Procedures Manual, Release 25.5.1.
The “to” MERS Assignments for Montana (Cx1536), Oregon (Cx1546), and Washington (Cx1553) are being edited in the following ways:
- Deleting any references to the holder of the instrument “selling” it to MERS;
- Referring to MERS as being the nominee of the holder;
- Deleting the last clause of the body of the assignment which states that the promissory note is being assigned to MERS along with the instrument; and
- Removing a reference that the “beneficial interest” of the loan is being assigned to MERS (Washington only).
The “from” MERS Assignments for Montana (Cx4332), Oregon (Cx4343), and Washington (Cx4353) are being edited in the following ways:
- Reformatting the clause concerning MERS, as nominee for a lender, and its successors and assigns to match the model clause provided in the Procedures Manual;
- Deleting any references to MERS “selling” the instrument to the assignee; and
- Deleting the last clause of the body of the assignment which states that the promissory note is being assigned from MERS along with the instrument.
These changes will take effect on October 30, 2014. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 23, 2014