MetaSource MERS Compliance Review Findings for 2020: Signs of Improvement in a Difficult Year

Record loan volumes amid pandemic-driven business interruptions set the stage for what might have been a disastrous year for MERS compliance. However, a MetaSource Annual Report analysis shows that the year played out differently, with servicers maintaining a trend toward overall improvement.

The Annual Reports MetaSource analyzed are a requirement of MERS membership. For companies with more than 1,000 mortgage identification numbers (MIN) in their servicing portfolios on March 31, the eAnnual Report process must be completed
by the end of each year with the assistance of an external reviewer.

During the analysis, MetaSource found that insufficient data reconciliation was the leading cause of exceptions in 2020. Several pandemic-related factors, including staff shortages and office closings, along with a surge in mortgage origination and refinancing volumes contributed to this being the #1 finding.

"Everybody scrambled to figure out how to work from home, and some servicers even decided at the onset of the pandemic, they needed to reduce their workforce," said MetaSource MERS Supervisor, Leighcie Gregg. "These decisions, combined with the extraordinary surge in volumes, meant there wasn't enough backup for some processes."

MetaSource Top MERS QA Findings in 2020

Our audit findings for 2020 showed three MERS QA challenges:

* Failure to conduct monthly data reconciliation or conducting data reconciliation that is not sufficiently thorough.

* Members' internal quality assurance audits, or their subservicer or third-party vendor process audits, did not meet MERS standards.

* Written internal policies and procedures were not detailed enough to comply with MERS requirements.

Despite the challenges, however, the analysis showed overall improvement, with exceptions occurring in 11% of audits in 2020, compared to 19% in 2019. MERS officials even reported seeing overall improvements, with fewer exceptions in 2020, as part of a steady trend year over year.

The good news is that in a difficult year, "more of our member clients are meeting those MERS requirements in full," Gregg said.

MetaSource's MERS QA 2020 Findings Report delves into the reasons behind the overall improvements being made, what MERS Members struggled with the most in 2020 and best practices for avoiding exceptions in 2021.

About MetaSource, LLC

MetaSource is a Digital Transformation Solutions provider, focused on Business Process Outsourcing (BPO) / Business Process Management (BPM) services integrated with Enterprise Content Management (ECM), workflow solutions, compliance services and customer experience processes. With offices in 8 U.S. states and over 800 employees, MetaSource helps its clients manage risk, improve quality, increase efficiency and realize their most important goals - with special expertise serving the mortgage industry. MetaSource's mortgage services include quality control (QC) audits (pre-fund, post-close, servicing, MERS), lien release, whole loan purchase reviews, and cutting-edge technology. MetaSource solutions enable its clients to focus on their core business while MetaSource does the rest.

FOR MORE INFORMATION: https://mortgage.metasource.com