Unanimous Decision in New York Huge Victory for MERS.

Business Editors/Real Estate Writers

VIENNA, Va.--(BUSINESS WIRE)--June 14, 2002

The Appellate Division, Second Judicial Department of the Supreme Court of the State of New York upheld its order requiring the Suffolk County Clerk to accept MERS mortgage documents for recording in its decision on June 10.

Suffolk County Clerk Edward P. Romaine last year had refused to accept for recording mortgage security instruments naming Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for the lender in the county land records contending that MERS was not the actual mortgagee.

MERS filed a lawsuit to require the county clerk to accept MERS documents for recordation and had received an earlier order from the Appellate Division requiring the county clerk to record the documents. The county clerk contested the order. This latest decision is a major blow to the clerk's efforts to resist his statutory duties.

"This decision is a huge victory for MERS and all mortgage companies doing business in New York," said R.K. Arnold, MERS President and CEO. "It affirms the legal basis upon which MERS serves its members and homeowners as mortgagee in the county land records. We're not surprised by the decision, but winning never gets old."

The Appellate Division found that, "Contrary to the contention of the Suffolk County Clerk, he has a statutory duty that is ministerial in nature to record a written conveyance if it is duly acknowledged and accompanied by the proper fee." The Court went on to say that, "Accordingly, the Clerk does not have the authority to refuse to record a conveyance which satisfies the narrowly-drawn prerequisites set forth in the recording statute." The Court mandated that the clerk record MERS documents.

MERS has advised its New York members doing business in Suffolk County to continue originating all new loans on MOM (MERS as Original Mortgagee) documents during this process and will continue to keep these lenders updated on the progress of the litigation.

The full text of the Court's ruling including legal citations is available on the MERS corporate website at www.mersinc.org.

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MERS is an electronic loan registry created by the real estate finance industry to eliminate paper assignments when trading mortgage loans. MERS members record MERS as mortgagee (as nominee for the lender) in the county land records. Then they register their loans on the MERS(R) System and electronically track changes in servicing and beneficial ownership rights over the life of the loan.

Loans registered with MERS are inoculated against future assignments because MERS remains the nominal mortgagee no matter how often servicing is traded between MERS members. Fannie Mae, Freddie Mac, VA, FHA, Ginnie Mae, the Federal Home Loan Bank MPF(R) Program, California and New York housing authorities, and all major Wall Street rating agencies have approved MERS.

To learn more, visit www.mersinc.org