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Merscorp, Inc.: Rules of Membership
Merscorp, Inc.: Rules of Membership
REGISTRATION ON THE MERS SYSTEM OBLIGATIONS OF MERS ENTITIES RULE CHANGES FEES PROCEDURES DISCIPLINARY ACTIONS FORECLOSURE
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INDEMNIFICATION
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MEMBERSHIP Section 1.
Registration Systems, Inc. (MERS SPE Inc.) shall make the services of itsthe mortgage electronic registration system (the MERS System) available to any Member of MERS. A Member is defined as an organization or natural person who has signed a Membership Agreement and is not more than 60 days past due as to the payment of any fees due and owing to MERSMERSCORP or MERS SPE Inc. MERS SPE Inc. and MERSCORP are each referred to as a MERS Entity. Following a Service Provider Replacement Event, as defined in Rule 11, Section 2, MERSCORP shall mean either MERS SPE Inc. or the Replacement Service Provider, as determined by MERS SPE Inc.
Section 2.
membership shall be taken on behalf of MERSMERSCORP by such persons as may from time
this Rule, no applicant shall be approved unless it meets each of the standards of financial condition, operational capability and character defined below: (a) If the applicant anticipates registering transactions on the MERS System,
the applicant has demonstrated to the satisfaction of MERSMERSCORP that it has adequate personnel capable of registering transactions on the MERS System with necessary promptness
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and accuracy, that such personnel shall complete the computer-based training program designated by MERSMERSCORP, and that the applicant has internal security procedures in
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RULE 1
place to conform to any condition and requirement which MERSMERSCORP reasonably deems necessary for its protection and the protection of other Members:
(b) MERSMERSCORP has received no information which, in the sole discretion of MERSMERSCORP, would adversely reflect on the applicant, or any person associated with the applicant as defined in Section 3 below, to such extent that access of the applicant to the MERS System should be denied, and any such applicant may be deemed not to meet the qualifications set forth in this paragraph only if:
(i) MERSMERSCORP shall have reasonable grounds to believe that the applicant, or any person associated with the applicant, has been or is responsible for (A)
convicted prior to the filing of its application to become a Member, or at any time
purchase, sale or pledge of a mortgage loan or any interest therein or arose out of conduct
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of the business of funding, acquiring, lending on the security of, or servicing mortgage loans (or any business ancillary or related to any of the foregoing), or involves robbery,
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thereafter while a Member, of any crime, felony or misdemeanor which involves the
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(ii) the applicant, or any person associated with the applicant, has been
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its application to become a Member, or thereafter while a Member, or (C) the violation of
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larceny, embezzlement, fraudulent conversion, forgery or misappropriation of funds or other property, or other dishonest acts; or
(iii) the applicant has been, or while a Member is, prohibited from transacting business with one or more of the following: (A) Fannie Mae, (B) Freddie
Mac, (C) Ginnie Mae, (D) the U.S. Department of Housing and Urban Development, or (E) the U.S. Department of Veterans Affairs; provided, however, that such prohibition shall not be the sole basis for denial of membership.
make application on such form as MERSMERSCORP shall from time to time prescribe. In connection with its application, an applicant shall submit its audited financial statements for its
applicant satisfies all of the standards for membership, and in connection therewith the applicant
information as MERSMERSCORP shall reasonably request for such purpose. Failure of an applicant to cooperate in providing requested books, records, and information shall be grounds for denial of the application for membership. Section 3. MERSMERSCORP may approve the application of any applicant, either
applicant, or any person associated with such applicant, is unduly or disproportionately severe or
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that the conduct of such applicant or person associated with such applicant has been such as not to make it against the interest of MERSMERSCORP, the existing Members, and the public to
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in its sole discretion determines that any standard specified in this Rule, as applied to such
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shall make available to MERSMERSCORP such books and records and shall provide such other
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two most recent fiscal years. MERSMERSCORP shall review the application to verify that the
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(c) Eligible organizations and natural persons seeking to become Members shall
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approve such application. MERSMERSCORP shall notify each applicant of the action taken with respect to its application and the reasons thereforetherefor. For purposes of this Rule, the
senior officer, director or controlling person of such person or entity or (ii) any officer or employee of such person or entity who has, or shall have, access to the MERS System.
Section 4.
the application of any applicant upon a determination by MERSMERSCORP that the MERS
that time to permit the inclusion of additional Members without impairing the ability of the MERS System to provide services for existing Members; provided, however, that applicants
the capabilities of the MERS System permit, in the reasonable judgment of MERSMERSCORP,
Section 5.
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Section 6.
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in the order in which their applications were filed with MERSMERSCORP or in such other order
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whose applications are denied solely pursuant to this section shall be approved as promptly as
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System does not have adequate space, data processing capacity or other operational capability at
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term person associated with when applied to any person or entity shall mean (i) any partner,
Section 7. Any Member may withdraw its membership from the MERS System by
withdrawal shall be effective on the ninetieth day after receipt at which time all rights and
obligations of the withdrawing Member shall cease, except any obligation of such Member to
pay fees or assessments assessed prior to withdrawal to the extent such obligation has not been
fulfilled and except for any conditions the MERSCORP Board of Directors may establish for the de-registration of mortgages from the MERS System, including fees to defray the costs of such
(a) Any Member that sells, transfers, or otherwise disposes of all or substantially all of its
withdrawn from membership in the MERS System as of the effective time of such disposition
Agreement with MERSMERSCORP and as such shall be bound by the MERS System Rules of Membership (these Rules of Membership) and Procedures of MERS(as defined in Rule 6).
(b) If any Member that merges or otherwise combines with any other entity and such
MemberMembership Agreement entered into by the Member shall remain in full force and effect as to the non-Member entity unless the surviving non-Member withdraws from membership or is
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other entity is the surviving entity and is a non-Member of the MERS System, then the
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of assets or combination with such entity unless the acquiring entity signs a Membership
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assets to any entity that is not a member of the MERS System, shall be treated as having
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deregistration.
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giving 90 days written notice to the President or Secretary of the CorporationMERSCORP. Such
(c)Members have an affirmative obligation to notify MERSMERSCORP in writing in the event of (i) any merger or combination with, or acquisition of, another member or (ii) merger, combination or acquisition by another entity.
(d) Members acknowledge and agree that the Members Organization Identification
Number (Org ID) and each Mortgage Identification Number (MIN) associated with that Org ID are the property of the MERS Entities and the use of such Org ID and MINs are subject to the terms and conditions of these Rules of Membership and the other Governing
(e) If a Member sells the contractual rights to service a loan registered on the MERS System to another Member, then the selling Member shall reflect such transfer on the MERS System in accordance with MERS rulesthese Rules of Membership and proceduresProcedures and a Seasoned Servicing Transfer Fee in the amount specified in the MERS Fee System Fees
MERSMERSCORP for each loan transferred, provided that the transfer date is more than 270 days from the Note Date for that loan. If (i) a Member initiates a servicing transfer transaction on the MERS System between two Org IDs issued to that Member or (ii) a Member initiates a servicing transfer transaction on the MERS System to another Member who is affiliated with
each loan transferred in the amount specified in the MERS Fee System Fees Schedule in effect
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at the time the transfer is effective, provided that the transfer date is more than 270 days from the Note Date for that loan and further provided that the affiliate relationship between the two Org
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that Member, then such transfer transaction shall be subject to a Intracompany Transfer Fee for
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Schedule (as defined in Rule 5) in effect at the time the transfer is effective shall be due to
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Ids is shown on the MERS System (i.e., referred to as a Parent/Child relationship in the MERS Procedures). Section 8.
any time. Each Member shall designate one individual within its organization as its contact person for all of such Members dealings with the MERS. System, MERSCORP or MERS SPE Inc. It is the Members responsibility to update the MERS System if the contact person
changes.
RULE 2
level of access to the MERS System permitted to each Member and the types of transactions
register any transaction not authorized under thethese Rules of Membership or the Procedures.
Section 2.
Section 3.
MERS System, in accordance with thethese Rules of Membership and the Procedures, any and
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all of the following transactions to which such Member is a party which involve a mortgage loan
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Subject to Section 1 above, each Member may register any mortgage loan
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that such Member may register on the MERS System. No Member may register or attempt to
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Section 1.
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registered on the MERS System until such time as the mortgage loan is deactivated from the MERS System:
(a) the pledge of any mortgage loan or security interest therein and the corresponding release of such security interests;
(b) the pledge of any servicing rights or security interest therein and the corresponding release of such servicing rights or security interests;
a Member;
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non-Member to a Member;
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(f) the transfer of servicing rights with respect to a mortgage loan by a Member to
(g) the registration of servicing rights with respect to a mortgage loan from a
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Member;
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(h) the transfer of servicing rights with respect to a mortgage loan from a Member
(i) the initiation of foreclosure of any mortgage loan registered on the MERS System;
(j) the release of a lien with respect to a mortgage loan registered on the MERS
MERS System that involves the recording of a new security instrument and does not merely change the rate, principal balance or term.
Section 4.
loan from the MERS System in accordance with these Rules of Membership and the Procedures. Upon the withdrawal or removal of a Member, all mortgage loans for which such Member acts
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as servicer shall be deactivated from the MERS System, provided, however, that the mortgage loans shall remain registered with the MERS System if the substitute servicer is a Member and
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mortgage loan registered on the MERS System shall require the deactivation of such mortgage
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all MERS System fees relating to the servicing transfer to the substitute servicer are paid. The transfer to a non-Member of a beneficial interest in a mortgage loan registered on the MERS
such transfer shall reflect the non-MERS member investor by using Organizational Identification Number (Org ID) 1000002 effective October 1, 2011. A deactivation is required if: (i) the servicer is a non-Member of MERS or (ii) such non-Member beneficial owner shall require deactivation.
mortgage loan registered on the MERS System is vested in a non-Member, MERS and Mortgage Electronic Registration Systems,MERSCORP and MERS SPE Inc. shall at all times
such mortgage loan with respect to transactions relating to such mortgage loan. Such Member
director, officer or affiliate of MERSCORP or MERS SPE Inc., for any and all liability incurred as a result of compliance by MERSCORP or MERS SPE Inc. with instructions given by such Member on behalf of the non-Member beneficial owner.
Registration Systems,MERS SPE Inc., to appear in the appropriate public records as the mortgagee of record with respect to each mortgage loan that the Member registers on the
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MERS System. Mortgage Electronic Registration Systems,MERS SPE Inc. is a wholly owned subsidiary of MERSMERSCORP created for the purpose of serving as the mortgagee of record
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Section 5.
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shall indemnify and hold harmless MERSCORP and MERS SPE Inc., and any employee,
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comply with the instructions of the Member shown on the MERS System as the servicer of
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(b)
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System shall not require the de-registration of such mortgage loan from the MERS System and
in the appropriate public records. The Member shall monitor the public records to verify that it has complied with the preceding sentence and shall maintain an adequate quality assurance
MERSCORP and MERS SPE Inc. that either (i) an appropriate mortgage, or deed of trust, or other such instrument as may be required under applicable state law, naming Mortgage Electronic Registration Systems,MERS SPE Inc. as mortgagee, or (ii) an appropriate assignment of mortgage, or assignment of deed of trust, or other such instrument as may be required under applicable state law, naming Mortgage Electronic Registration Systems,MERS SPE Inc. as
appropriate recording office and the Member shall promptly register on the MERS System the date on which such instrument was delivered. As soon as practicable, the Member shall register
records which evidences that Mortgage Electronic Registration Systems, Inc. is mortgagee of
discrepancy between the information shown on the MERS System and the information in the public records, the Member shall promptly correct the information on the MERS System.
(b)
demonstrating that Mortgage Electronic Registration Systems,MERS SPE Inc. is, or as soon as practicable shall be, properly recorded as mortgagee of record in the appropriate public records
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record with respect to such mortgage loan. Upon the Members becoming aware of any
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on the MERS System the specific recordation information provided by the custodian of public
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mortgagee, has been or as soon as practicable shall be, properly prepared and delivered to the
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program to ensure that its verification procedures are effective. The Member hereby warrants to
(c) Mortgage Electronic Registration Systems, MERS SPE Inc. shall not act as mortgagee of record for the purpose of procuring borrowers for the Member or making mortgage
(d)
other form of security instrument under applicable state law. References herein to mortgagee of record shall include the named beneficiary under a deed of trust in those jurisdictions where deeds of trust are used to secure loans, and any similar status as used in connection with any
Section 6.
MERSEach Member hereby appoints MERS SPE Inc. as its nominee (as a
MERSCORP and MERS SPE Inc. shall at all times comply with the instructions of the holder of
owner, MERS and Mortgage Electronic Registration Systems,MERSCORP and MERS SPE Inc. may rely on instructions from the servicer shown on the MERS System in accordance with these Rules of Membership and the Procedures with respect to transfers of beneficial ownership, transfers of servicing rights, and releases of security interests applicable to such mortgage loan.
Electronic Registration Systems,MERSCORP and MERS SPE Inc. in writing and they may rely on such instructions until receipt of further written instructions from the beneficial owner.
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The beneficial owner shall give any such contrary instructions to MERS and Mortgage
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mortgage loan promissory notes. In the absence of contrary instructions from the beneficial
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limited agent) with respect to each mortgage that such Member registers on the MERS System.
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Section 7.
Each Member shall review for accuracy and completeness all information
shown on the MERS System with respect to mortgage loans and related transactions registered
Section 8.
Within ten (10) business days of receiving notice from the Member
servicing the loan that the mortgage loan has been paid in full, MERSMERSCORP shall give notice to all Members shown on the MERS System as having interests in such mortgage loan. The Member servicing the mortgage loan shall be responsible, at its own expense, to:
(a)
the lien of such mortgage in the proper manner within the applicable state imposed time frames,
paid in full. If MERSMERSCORP is notified that a lien release has not been executed in compliance with applicable state imposed time frames, and the Member fails to take such action or give MERSMERSCORP notice that the mortgage loan has not been paid in full, then each MERS Entity reserves the right to release such mortgage. Such Member, upon demand, shall
in connection with release of the mortgage, including any penalties for failure to release the
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mortgage or take other action in a timely manner, and shall pay an administrative fee determined by Mortgage Electronic Registration Systems,MERS SPE Inc., and
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reimburse Mortgage Electronic Registration Systems,MERS SPE Inc. for its out-of-pocket costs
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(b)
notify MERSMERSCORP that, in fact, the mortgage loan has not been
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result of the failure of such Member to take such action or give MERSMERSCORP such notice in a timely and accurate manner. Without limiting the generality of the foregoing, such indemnification shall extend to circumstances in which a mortgage is released by Mortgage Electronic Registration Systems,MERS SPE Inc., but the mortgage loan has not been paid in full, or in which such Member wrongfully refuses to authorize Mortgage Electronic Registration Systems,MERS SPE Inc. to release the mortgage.
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Systems,MERSCORP and MERS SPE Inc. with respect to any liability which may arise as a
(c)
indemnify
MERS
and
Mortgage
Electronic
Registration
appropriate Member or Members, in the form prescribed by and otherwise in accordance with the Procedures, all properly identified notices, payments, and other correspondence received by MERSCORP or MERS SPE Inc. with respect to mortgage loans registered on the MERS System for which Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. serves as mortgagee of record.
Section 2.
concerning information contained on the MERS System, as specified in the Procedures, and such other reports as MERSMERSCORP may determine from time to time.
Section 3.
(a)
Upon request from the Member, Mortgage Electronic Registration shall promptly furnish to the Member, in accordance with the
Procedures, a corporate resolution designating one or more officers of such Member, selected by such Member, as certifying officers of Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (a MERS Corporate Resolution) to permit such Member (i) to release the lien of any mortgage loan registered on the MERS System to such Member, (ii) assign the lien of any
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registered to the Member, (iii) to foreclose upon the property securing any mortgage loan registered on the MERS System to such Member, (iv) to take any and all actions necessary to
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mortgage naming MERS SPE Inc. as the mortgagee when the Member is also the current
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protect the interest of the Member or the beneficial owner of a mortgage loan in any bankruptcy proceeding regarding a loan registered on the MERS System that is shown to be registered to
obligations to the beneficial owner of such mortgage loans (including mortgage loans that are removed from the MERS System as a result of the transfer thereof to a non-Member), (vi) to take action and execute all documents necessary to refinance, amend or modify any mortgage loan registered on the MERS System to such Member, (vii) endorse checks made payable to MERS to the Member that are received by the Member in payment on any mortgage loan
where Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. designates an officer of a Member as a certifying officer of MERS SPE Inc. for the limited purposes described above,
employees, directors, officers, agents or affiliates against all loss, liability and expenses which
(b) Upon request by Mortgage Electronic Registration Systems,MERS SPE Inc. , the Member shall deliver to Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. a corporate resolution naming the Corporate Secretary of Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. as a certifying officer of the Member solely for the purpose of
record on mortgage loans which have been registered on the MERS System by the Member.
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thereof as shown on the MERS System, Mortgage Electronic Registration Systems, Inc.MERS
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they may sustain as a result of any and all actions taken by such certifying officer.
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such Member shall indemnify each of MERSCORP and MERS SPE Inc.
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registered on the MERS System that is shown to be registered to the Member. In instances
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the Member, (v) to take such actions as may be necessary to fulfill such Members servicing
SPE Inc. shall provide to such beneficial owner or designee a recordable assignment for such mortgage loan to another party designated by the beneficial owner or designee; provided,
Registration Systems, Inc.MERS SPE Inc. that such assignment shall be promptly recorded. Requests for recordable assignments may be made only for purposes of deactivating a mortgage loan from the MERS System. The deactivation of a mortgage loan for any reason shall be subject to the payment of all applicable fees and expenses, including, without limitation, the costs of preparing and recording the assignment. All such applicable fees and expenses shall be
Section 4.
designated by the respective BoardsBoard of Directors of MERS and Mortgage Electronic Registration Systems,MERSCORP or MERS SPE Inc.
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MERSCORP or MERS SPE Inc. , as applicable, by such persons as may from time to time be
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however, that such beneficial owner or designee shall warrant to Mortgage Electronic
proposed changes to thethese Rules of Membership, and shall provide a copy of such proposed changes to all Members no fewer than ninety (90) days prior to the proposed implementation date of such changes.
comments with respect to any such proposal, and such comments shall be reviewed by MERSMERSCORP and filed with the records kept by MERSMERSCORP. Notwithstanding the
discretion, shall have the right to amend, add to or repeal any Rule or part thereof after the
(c) Each Member shall be bound by any amendment to the Rules with respect to any transaction occurring subsequent to the time such amendment takes effect as fully as though
affect the Members right to withdraw from the MERS System in accordance with the procedures set forth in these Rules of Membership before such amendment or change becomes
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effective.
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such amendment were now a part of the Rules; provided, however, that no such amendment shall
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expiration of such ninety (90) day comment period, so long as such amendment is not contrary to
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receipt of any such comments, the Board of Directors of MERSMERSCORP, in its sole
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(d)
MERSMERSCORP shall provide a ninety (90) day written notice for any
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MERSMERSCORP for membership, registrations, transfers, and other transactions on the MERS System and other services rendered by MERSMERSCORP as shall be determined from time to time by MERSMERSCORP in its sole discretion, and specified in a fees schedule promulgated by MERSMERSCORP which may change from time to time (the MERS System Fees Schedule). (b)
advance written notice of changes to the fees scheduleMERS System Fees Schedule with the effective date of the new fees. (c)
Intra-company Transfers) shall be payable by the transferor. If the transferor fails to pay such
otherwise be located or contacted, MERSMERSCORP will invoice the transferee and the immediate payment of those transaction fees shall be the responsibility of the transferee. Any monies received by MERSMERSCORP from the bankruptcy estate of the transferor shall be applied as a credit to the transferees MERSMERSCORP account. MERSMERSCORP has
MERSMERSCORP and is in the best position to protect itself by holding back a portion of the purchase price when purchasing the corresponding loans.
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invoked this provision because the transferee has received the benefit of the service provided by
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transaction fees due to bankruptcy, or because the transferor is no longer in business or cannot
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Transaction fees for the transfer of servicing between MERS Members (including
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responsible for the cost if the servicing transfer transactions have not been initiated on the MERS System, and the transferor cannot initiate the transactions themselves due to the
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MERSMERSCORP shall provide all Members with at least thirty (30) days
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circumstances listed in the preceding sentence and the transferee requests such transaction to be initiated by MERSMERSCORP. If the transferee fails to pay any transaction fees by the invoice
pending the payment in full by the transferee of such transaction fees. (d)
thethese Rules of Membership and Procedures, and that Member subsequently transfers the servicing rights to that mortgage loan to another Member without first paying the registration fee to MERSMERSCORP pursuant to Rule 5, Section 1(a), and the transferor fails to pay such
otherwise be located or contacted, MERSMERSCORP will invoice the transferee and the immediate payment of those transaction fees shall be the responsibility of the transferee. Any
MERSMERSCORP and is in the best position to protect itself by holding back a portion of the purchase price when purchasing the corresponding loans. If the transferor has not registered the mortgage loan on the MERS System and is unable to register the mortgage loan due to
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contacted, then the transferee must register the mortgage loan and pay the corresponding If the transferee fails to pay any transaction
fees by the invoice due date, MERSMERSCORP may suspend the transferees access to the
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invoked this provision because the transferee has received the benefit of the service provided by
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monies received by MERSMERSCORP from the bankruptcy estate of the transferor shall be
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transaction fees due to bankruptcy, or because the transferor is no longer in business or cannot
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due date, MERSMERSCORP may suspend the transferees access to the MERS System
Section 2.
unusual expenses caused directly or indirectly by such Member, or incurred at its request,
legal process in any litigation or other legal proceeding to which such Member is a party or in which such records relating to such Member are so required to be produced, whether such production is required at the instance of such Member or of any other person, provided however, that MERSMERSCORP shall give the Member written notice of such Court Order or legal process in advance of producing the records to enable the Member to pursue its legal rights to
Section 3.
Each Member shall pay interest on any delinquent fee payments at the rate
set from time to time by MERSMERSCORP. Said interest rate shall be specified in the fees schedule.
Section 4.
that is forwarded to the Member by a MERS Entity on a property where MERS SPE Inc. holds a lien or held a lien for that Member, the Member has an affirmative duty to the MERS Entities to review the document and respond accordingly. This includes retaining counsel to defend the MERS Entities against any possibility of a monetary judgment against a MERS Entity. If the
of the Member, and the Member determines not to contest the foreclosure or answer the lawsuit,
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the Member should inform the foreclosing party to send subsequent documents in the lawsuit or foreclosure to MERS SPE Inc. c/o of the Members address.
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lawsuit or document involves a foreclosure action with MERS SPE Inc. holding a lien on behalf
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service of process on a lawsuit naming a MERS Entity as a defendant, or a code violation notice,
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including, without limitation, the cost of producing records pursuant to a court order or other
If MERSMERSCORP determines that MERS SPE Inc. s receipt of mail involving a foreclosure proceeding, lawsuit or code violation resulted from a violation of any of the MERSthese Rules of
a fee of $12.00 for each filing or document in the proceeding or for each piece of mail received related to the code violation that MERS SPE Inc. forwards to the Member beyond the initial service of process or notification that MERS SPE Inc. received on behalf of that Member. RULE 6 PROCEDURES Section 1. (a)
Procedures with respect to the business and operation of MERS and Mortgage Electronic Registration Systems, Inc.MERSCORP and the MERS System and the execution of transactions on the MERS System (the Procedures). Each Member shall be bound by such Procedures and any amendment thereto in the same manner as it is bound by the provisions of the By-Laws and these Rules of Membership.
(b) MERSMERSCORP shall give Members sixty (60) days notice prior to implementation of any amendment to the Procedures.
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Membership or the Procedures, then MERSMERSCORP shall be entitled to charge the Member
Member for one or more violations of these Rules of Membership or the Procedures or for errors, delays or other conduct detrimental to the operation of MERS or Mortgage Electronic Registration Systems,MERSCORP or MERS SPE Inc. , the MERS System or other Members, including, without limitation, a Members failure to provide adequate training and supervision to
(a) removal as a Member, but only if the notice requirements of Rule 7, Section 2 below have been met by MERSMERSCORP;
(e) any other fitting requirements that may be determined by MERSMERSCORP. Section 2.
the terms of any such violation and possible sanction, which shall include a brief description of the basis for the imposition of the sanction. The Member shall then have fifteen (15) days from the date of receipt of the notice to provide a written response and have an opportunity to be heard.
occurred and that sanctions may be imposed, the Member shall be given thirty (30) days to cure
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the breach. If the breach is not cured within the thirty (30) days, MERSMERSCORP may impose such sanctions on the Member. If the Member does not cure the breach during the thirty
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At the expiration of the fifteen (15) days, if MERSMERSCORP determines that a breach has
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(d) censure; or
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its employees to enable proper use of the MERS System, by imposing any of the following:
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(30) day curing period, then upon the expiration of the curing period, MERSMERSCORP shall notify any other member of MERSMERSCORP for whom the breaching Member acts as an
Section 3. If the nature of the breach is the same or similar to a breach by the Member that has occurred within the last year, there may not be a curing period.
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secured by a mortgage, deed of trust or security deed (any such instrument is referred to herein as a Security Instrument), for which the note owner or the note owners servicer has decided to: (i) initiate foreclosure proceedings, whether judicial or non-judicial or (ii) file a Proof of Claim or file a Motion for Relief from Stay in a bankruptcy (Legal Proceedings); and for which Mortgage Electronic Registration Systems, Inc. ( referred to herein as MERS)MERS SPE Inc.
owners servicer shall cause a MERS Certifying Officer (also known as a Signing Officer) to execute an assignment of the Security Instrument from MERS SPE Inc. to the note owners
Member agrees and acknowledges that MERS SPE Inc. has the authority to execute such
The assignment of the Security Instrument must be executed, notarized, witnessed (if applicable) and be in recordable form and comply with all applicable laws, regulations and rules. (b) The Member agrees and acknowledges that
when MERS SPE Inc. is identified as nominee (as a limited agent) of the note owner in the
applicable), in the Security Instrument on behalf of and for the benefit of the note owner.
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Security Instrument, MERS SPE Inc., as nominee, is the mortgagee, beneficiary, or grantee (as
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assignment of the Security Instrument in accordance with the immediately preceding sentence.
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servicer, or to such other party expressly and specifically designated by the note owner. The
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is the mortgagee, beneficiary or grantee of record (as applicable), the note owner or the note
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accordance with the applicable agreements between such Member and the note owner and all applicable laws, regulations and rules. (d)
file Legal Proceedings in the name of MERS SPE Inc. granted to a Members Certifying Officers under such Members MERS Corporate Resolution is revoked for actions initiated on or after July 22, 2011, the effective date of this Rule. (the Effective Date). Effective September 1, 2011, the Member whose Certifying Officer initiates a foreclosure in MERS SPE Inc.s name could be sanctioned by MERSMERSCORP pursuant to Rule 7, provided however, if the Member
of filing the action, no sanction shall be levied. The authority to file Proof of Claims and Motions for Relief from Stay in the name of MERS SPE Inc. granted to a Members certifying officer
(e)
from MERS SPE Inc. to the note owners servicer, or to such other party expressly and specifically designated by the note-owner before initiating foreclosure proceedings or filing Legal Proceedings and promptly send the assignment of the Security Instrument (in recordable form) for recording in the applicable public land records.
require the party initiating foreclosure proceedings or filing Legal Proceedings to also be
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the mortgagee, beneficiary, or grantee of record (as applicable), the note owner or the note owners servicer shall cause the Certifying Officer to execute the assignment of the Security Instrument from MERS SPE Inc. to the note owners servicer or to such other
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servicer shall cause the Certifying Officer to execute the assignment of the Security Instrument
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voluntarily dismisses such foreclosure or withdraws the filed Legal Proceedings within 21 days
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party expressly and specifically designated by the note-owner, either before or promptly after initiating foreclosure proceedings or filing any Legal Proceedings and promptly
applicable land records; provided, however, until MERS SPE Inc. has identified and MERSCORP has published a list of states that do not require an executed assignment of the Security Instrument from MERS SPE Inc. to the note owners servicer, or to such other party expressly and specifically designated by the note owner before initiating foreclosure proceedings or filing Legal Proceedings, the note owner or the note-owners
to the note owners servicer, or to such other party expressly and specifically designated by the note owner before initiating foreclosure or filing Legal Proceedings in all states.
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servicer shall cause the Certifying Officer to execute the assignment from MERS SPE Inc.
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send the assignment of the Security Instrument (in recordable form) for recording in the
Section 1 (a) Each Member shall at all times keep confidential and shall not sell or otherwise disclose any information contained on the MERS System that is (i) not owned by such Member, (ii) was not originally provided by Member to a MERS Entity, or (iii) is not available in public records or otherwise known to the Member. The MERS Entities and the Member shall use a reasonable degree of care consistent with the Standards for Safeguarding Customer Information (16 C.F.R. parts 314) (the Safeguards Rule) to preserve the confidentiality of any such information, and to take all reasonable action by instruction, agreement or otherwise with its directors, officers, employees, affiliates and agents to satisfy its obligation with respect to confidentiality, non-disclosure and limitation of use of any such information. The obligations of the MERS Entities and the Member under this Rule 9 shall survive termination of this agreement.
to any information contained on the MERS System. Notwithstanding the foregoing, each MERS Entity is authorized to (i) use the information contained on the MERS System to compile transaction volume reports to track current or previous usage levels, project future usage and provide the mortgage industry with usage data which may be used to gauge the success of
than in reports given to the MERS Board of Directors of a MERS Entity, (ii) use the information
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contained on the MERS System as part of its quality control process to monitor compliance with operational standards and time frames, (iii) furnish any information contained on the
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MERS System to any governmental authority pursuant to a subpoena or court order, provided, however, that MERSMERSCORP shall undertake, to the extent it reasonably can under the
mortgage loan which is the subject of such subpoena or court order to allow such Members time to attempt to quash such subpoena or court order, or (iv) provide information and reports (as approved by the Board) regarding mortgage activity and mortgage loans registered on the MERS System that otherwise could have been obtained through the public land records if not for the implementation of the MERS System.
(c) Any reports given to third parties shall not identify individual Members or borrower names and addresses as to transaction information without the Members
entering customer information into the MERS System to which a MERS Entity has access as a part of the services provided to the Member, and (b) such customer information is subject to Section 1 of Rule 9 of the MERSthese Rules of Membership Use and Ownership of Information.
designed to meet the Objectives set forth in 16 C.F.R. 314.3(b) of the Safeguards Rule.
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Section 2. (a) Each MERS Entity acknowledges and agrees that: (a) the Member will be
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prior consent.
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circumstances, to notify all Members shown on the MERS System as having an interest in a
MERSMERSCORPs controls and procedures designed to safeguard the confidentiality and security of the information stored on the MERS System are generally
believes the controls and procedures so described meet the Objectives specified in the Safeguards Rule. MERSMERSCORP agrees to maintain controls and procedures designed to safeguard the confidentiality and security of the information stored on the MERS System that are no less stringent than those described in the current version of the MERS System Integration Handbook. MERSMERSCORP further agrees that any changes or modifications to
Safeguards Rule.
Member believes that the controls and procedures designed to safeguard the confidentiality and
the Safeguards Rule. MERSMERSCORP agrees the Member (or a mutually agreeable third
provisions of this paragraph, including access to any audits, summaries of test results or other equivalent evaluations of the controls and procedures designed to safeguard the confidentiality and security of the information stored on the MERS System. MERSMERSCORP will
promptly report to the Member any actual or suspected breach of the confidentiality or security
section, MERSMERSCORP maintains, and will continue to maintain, a Disaster Recovery Plan,
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a summary of which will be supplied to the Member upon request. MERSMERSCORP agrees that the Disaster Recovery Plan will be reviewed at least annually and will include annual testing
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(c) As part of the controls and procedures described in paragraph (b) of this
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party representative) will be given access to monitor that MERSMERSCORP has satisfied the
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security of the information stored on the MERS System fail to meet the Objectives specified in
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such controls and procedures will also be designed to meet the Objectives specified in the
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described in the MERS System Integration Handbook (Volumes I and II). MERSMERSCORP
to ensure that the MERS System can be restored within 48 hours after the declaration of a disaster under the plan.
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MERS System to an interim funding lender, such as a warehouse lender, shall be shown as released on the MERS System when the security interest has been released in accordance with the methods and procedures established among the interim funding lender, the lender granting the security interest and the subsequent purchaser of such mortgage loan, if any, as specified
Section 2.
owner registers its interest on the MERS System; or (ii) for investors selecting Option 2 of the
lender registers the release of its security interest on the MERS System.
Section 3.
only, (ii) Member makes no representations or warranties about the accuracy and completeness of such information, and (iii) Member shall not be liable to MERSMERSCORP, any other
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member, or any other party based on the provision of, and reliance on, such information.
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MERSMERSCORP and Member agree that: (i) such information is for informational purposes
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Procedures, when the beneficial owner registers its ownership of the loan and the interim funding
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the MERS System: (i) for investors selecting Option 1 of the Procedures, when the beneficial
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services, resources, software, equipment and facilities (collectively, the Services) as determined from time to time by the Board of Directors of MERSMERSCORP and described more particularly in the Procedures. MERSMERSCORP shall provide the Services in
compliance with reasonable performance standards (the Performance Standards) as determined from time to time by the Board of Directors of MERSMERSCORP and described more
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respect to the operation of the MERS System pursuant to the Intercompany Services Agreement dated as of June 8, 2011 between MERSCORP and MERS SPE Inc. (as amended if applicable) (a Service Provider Replacement Event), then MERS SPE Inc. shall promptly notify the Members of such event in writing and designate one or more third parties (each, a Replacement Service Provider) to provide such services to MERS SPE Inc.
System Membership Terms and Conditions to the contrary, if a Service Provider Replacement Event occurs (i) MERSCORP shall be deemed to no longer be a party to or subject to these Rules
assessments shall be payable directly by Members to MERS SPE Inc. and/or the Replacement Service Provider(s) as directed by MERS SPE Inc., with such amendments as MERS SPE Inc. may make as deemed necessary or appropriate in accordance with the provisions of these Rules of Membership applicable to amendments.
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entitled to any Member fees, charges and assessments, and all Member fees, charges and
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of Membership or the MERS System Membership Terms and Conditions (except that the rights
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Section 2.
Services shall be rendered with promptness and diligence in accordance with the practices and high professional standards used in well-managed operations performing services similar to the Services and shall be performed in a workmanlike and cost effective manner. MERSMERSCORP represents and warrants that it shall use, and shall require all third-party
experience, and skill to perform the Services and satisfy the Performance Standards.
equipment and software used in the performance of the Services shall be maintained so that they
in good operating condition, subject to normal wear and tear, (ii) undertaking prudent repairs and preventive maintenance on such equipment, and (iii) performing prudent software maintenance, including timely updating software used in the performance of the Services, including the MERS System, to meet any applicable legal or regulatory changes.
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Section 3.
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Technology.
Services shall be provided using proven technology which shall take advantage of technological
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operate in accordance with the Performance Standards, including (i) maintaining such equipment
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Section 2.
Maintenance.
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vendors to use, adequate numbers of qualified personnel with suitable training, education,
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Section 4. Non-Infringement. MERSMERSCORP represents and warrants that it shall, and shall require its Third Party Vendors to, perform its responsibilities in a manner that
Section 5. Software Ownership or Use. MERSMERSCORP represents and warrants that, with respect to the software used in the performance of the Services, it either owns, or is authorized to use, the software in the performance of the Services.
Section 6. Authorization. MERSMERSCORP represents and warrants that it has the requisite corporate power and authority to carry out its responsibilities.
herein) into the MERS System and any other systems and software used to provide the Services and it shall take reasonable business precautions to ensure that no Viruses are coded or introduced into the MERS System and any other systems and software used to provide the Services. The term Viruses shall mean any (i) program code, programming instruction or set
adversely affect computer programs, data files or operations; or (ii) other code typically designated to be a virus.
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of instructions intentionally construed with the ability to damage, interfere with or otherwise
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third-party vendors providing the Services shall not code or introduce any Viruses (defined
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does not infringe, or constitute an infringement or misappropriation of, any patent, copyright,
Section 8. Disabling Code. MERSMERSCORP represents and warrants that it and any third-party vendor providing the Services shall not insert into the MERS System and in any
disabling or otherwise shutting down all or any portion of the MERS System or Services.
Section 9. Millennium Compliant. MERSMERSCORP represents and warrants that the MERS System shall have the ability to provide all of the following functions: (a) consistently handle date information before, during and after January 1, 2000, including without limitation
dates; (b) function accurately and without interruption before, during and after January 1, 2000, without change in operations associated with the advent of the new century; (c) respond to
defined, and predetermined manner; and (d) store and provide output of date information in ways
Section 10.
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two-digit year-date input in a way that resolves any ambiguity as to century in a disclosed,
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accepting date input, providing date output, and performing calculations on dates or portions of
Registration Systems, Inc.MERSCORP and MERS SPE Inc. represents and warrants that each has obtained all state licenses and has qualified to conduct business in all fifty states and the
serving as mortgagee of record, solely as nominee, in an administrative capacity, for the beneficial owner thereof.
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District of Columbia where such licensing and/or qualification is required by law for an entity
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Mortgage
other systems and software used to provide the Services any code which would have the effect of
Electronic
Section 11.
to the Member that it has in place and will continue to maintain a fully effective disaster
disaster recovery plan to ensure its continued effectiveness and capability of protecting its Members in the event of a disaster. MERSMERSCORP will provide the results of such test to the a Member in writing upon request.
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recovery plan. MERSMERSCORP will routinely (no less often than once per year) test its
RULE 13 INDEMNIFICATION
Section 1.
MERS SPE Inc. agree to indemnify the Member and the Member agrees to indemnify MERS and Mortgage Electronic Registration Systems,MERSCORP and MERS SPE Inc. in accordance with SectionParagraph 9 of the MERS System Membership Terms and Conditions . In addition to SectionParagraph 9 of the MERS System Membership Terms and Conditions, the following
(a) the indemnified party may but shall not be obligated to participate in the
(b) the indemnified party shall cooperate and provide assistance as the indemnifying party reasonably requests and shall be entitled to recover reasonable costs of providing assistance.
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compromise or settle the claim if such compromise or settlement would impose an injunction or
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(c) the indemnifying party shall keep the indemnified party informed on status of
(d) the indemnifying party shall not, without indemnified partys written consent,
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defense at its own expense and using counsel of its own choosing; provided, however, that the
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other equitable relief upon indemnified party or such compromise or settlement does not include the third partys release of the indemnified party.
(e) if indemnifying party fails to timely defend, contest or otherwise protect against the claim and fails to contest in writing the indemnified partys right to indemnification, the indemnified party may, but shall not be obligated to defend and make any compromise or settlement and recover the costs thereof from the indemnifying party.
(f) If the indemnifying party contests in writing the indemnified partys right to indemnification, then the indemnified party shall defend the claim and may seek to recover all expenses paid by the indemnified party from the indemnifying party, and if successful, shall not be liable to pay the fees and expenses of initiating the mediation or arbitration pursuant to the MemberMembership Agreement.
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Section 1. The provisions set forth in this Rule 14 are in addition to those provisions set forth in Rule 13 of the MERSthese Rules of Membership and Paragraph 9 of the MERS System Membership Terms and Conditions. To the extent that any provision of this Rule 14 conflicts with any provision of Rule 13 of the MERSthese Rules of Membership or Paragraph 9 of the
Section 2.
(a)
Inc. of any and all lawsuits or written threats to initiate lawsuits that (i) involve a mortgage loan
any other significant right or interest, and (ii) name (or threaten to name) MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (whether or not the Member is also a named party).
(whether or not the Member is also a named party) in response to a proceeding initiated by such
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Member (either in its own name or in the name of MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. ), including without limitation counterclaims that are
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against MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc.
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in which the Member has ownership rights, servicing or subservicing rights, secured interests, or
The Member shall notify MERSCORP, Inc. of any claims that are filed
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MERS System Membership Terms and Conditions, the provisions of this Rule 14 shall control.
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filed in response to a foreclosure action commenced by the Member in the name of MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (c)
interests in a mortgage loan, and receives notice of a lawsuit, a written threat to initiate a lawsuit or a claim (as such lawsuits, threatened lawsuits and claims are described in Section 2(a) and (b) of this Rule 14) from the MERSCORP, Inc. mailroom, the Member must notify MERSCORP, Inc. of (i) such lawsuit, threatened lawsuit or claim, and (ii) the transfer or termination of the Members rights and interests in the subject mortgage loan.
Section 3. The Member shall notify MERSCORP, Inc. of all lawsuits, threatened lawsuits or claims (as such lawsuits, threatened lawsuits and claims are described in Section 2(a) and (b) of
(i)
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(iii) (iv)
respect to the subject lawsuit, threatened lawsuit or claim (which may be in-house counsel);
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All notifications required by this Rule 14 shall include (as applicable): the name of the lawsuit, and the county, state and court in which the
the date the complaint was filed and the date the Answer is due; the name and phone number of the contact person of the Member with
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this Rule 14), regardless of the method, person or entity by which the Member receives notice of
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(v)
the name and telephone number of the attorney and law firm, if any,
retained by the Member with respect to the subject lawsuit or claim; and (vi)
possession of the Member or a copy of the written threat to initiate a lawsuit (as applicable).
(b)
All notices required by this Rule 14 shall be sent to the attention of the General
Counsel of MERSCORP, Inc. either via fax to (703) 748-0183 (which is confirmed by
by delivery report or equivalent thereof), via registered or certified mail (return receipt requested and postage prepaid) to 1818 Library Street, Suite 300, Reston, VA 20190, or via a nationally
(c)
MERS System Membership Terms and Conditions by (i) the failure of the Member to receive proper notification from a third party with respect to a lawsuit, threatened lawsuit or claim, or (ii) the proper notification, pursuant to this Rule 14, of a lawsuit, threatened lawsuit or claim from
the Members indemnification obligations under the MERS System Membership Terms and
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Conditions and the MERSthese Rules of Membership (including without limitation this Rule 14). With respect to a Member Indemnified Claim (as that term is defined in Paragraph 9 of the
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recognized overnight courier (prepaid and providing proof of delivery) to 1818 Library Street,
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a copy of all pleadings with respect to the subject lawsuit or claim in the
MERS System Membership Terms and Conditions), Member and/or its retained counsel shall take all necessary and appropriate actions to assert promptly valid defenses available to
applicable), even if such defenses are unavailable to the Member, including without limitation the defense that the claim against MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. inappropriate party. (as applicable) should be dismissed as a claim against an
obligations (including its obligation to defend) under Paragraph 9 of the MERS System Membership Terms and Conditions with respect to a Member Indemnified Claim, within the
Indemnified Claim, either from MERSCORP, Inc., Mortgage Electronic Registration Systems,
MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (as applicable) to submit an initial response to the Member Indemnified Claim, then MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (as applicable) shall have the right (but not the obligation) to hire independent counsel and to undertake the defense,
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Electronic Registration Systems, Inc.MERS SPE Inc. defended a Member Indemnified Claim or
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settlement and/or compromise of such Member Indemnified Claim on behalf of, and at the sole
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or a third party, and (ii) thirty (30) days prior to the deadline for
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earlier date of (i) thirty (30) days after receipt by the Member of notice of the Member
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MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (as
none of these entities defended such claim, and regardless of whether MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. had notice of the Member
immediately post a Surety Bond or Letter of Credit for the amount of the judgment pending any motions to set aside or vacate the judgment; or appeal of the judgment; or any challenges made by either the Member or MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. to the judgment. It is the Members responsibility to pay the amount of the
the MERS System Membership Terms and Conditions) on behalf of MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. (as applicable), and (ii) if
defends against the enforcement of a judgment (which MERSCORP, Inc. and/or Mortgage
the Member shall promptly reimburse MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc. Payments related to such defense.
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Electronic Registration Systems, Inc.MERS SPE Inc. shall have the right to do in its discretion),
provide MERSCORP, Inc. with (i) copies of all public pleadings it receives from third parties (and notice of protected pleadings it receives from third parties), (ii) copies of all public
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pleadings it files on its own behalf, and (iii) copies of all pleadings it files on behalf of MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc.
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MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc.MERS SPE Inc.
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judgment and any other related Indemnified Payments (as that term is defined in Paragraph 9 of
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Section 5. The obligations of the Member under this Rule 14 shall survive the termination of the Members use of the MERS System.
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