Corker proposes alternative to MERS
Sen. Bob Corker, R-Tenn., hopes to create a new mortgage registration system to streamline the transfer of mortgages nationally. Corker said the registry would function similar to the Mortgage Electronic Registration Systems by creating a single, nationally recognized system for the transfer of loans. Corker included the MERS redux proposal in his Residential Mortgage Market Privatization and Standardization Act, a bill introduced this week to outline the mortgage finance market's transition from dominance by government-sponsored enterprises to a privatized system. The bill sets benchmarks for winding down the government-sponsored enterprises and aims to replace the qualified residential mortgage and risk retention rule with a 5% down-payment and a full mortgage documentation requirement. In a statement, Corker said the act will reduce the percentage of newly issued mortgage-backed securities by Fannie Mae and Freddie Mac every year for a decade. The plan essentially establishes a 10-year time line for privatizing the entire mortgage market, eventually eliminating the need for Fannie and Freddie. The Corker plan also aims to establish an industry-financed database for holding and providing performance and origination data on U.S. home mortgages. In addition, the plan outlines a process for delivering rules and technology to the new "to-be-announced" mortgage market, while permitting private investors to acquire any technology, home price indices and mortgage finance systems owned by the GSEs. To resolve legal issues tied to the securitization of mortgages, the Corker bill also advocates for the creation of a uniform pooling and servicing agreement to create certainty in the securitization process. Write to Kerri Panchuk.