MetaSource, LLC

MetaSource, LLC MERS Compliance Reviews for 2019 Show Some Reconciliation Practices Coming Up Short

Some MERS Users Rely on Inadequate Portfolio Analysis for QA Review


Draper, UT -- (ReleaseWire) -- 02/27/2020 --A MetaSource examination of 2019 third-party review results conducted in accordance with MERS eAnnual review requirements shows data reconciliation processes are a continuing source of difficulty for MERS members.

MetaSource, LLC, a leading provider of mortgage technology and services, does an annual review of findings identified as part of the third-party QA audits it provides to MERS member clients in preparation for the eAnnual reports due each year on Dec. 31.

Third-party reviews are required by MERS for member companies having more than 1,000 mortgage identification numbers (MIN) in their servicing portfolios on March 31st of the current year.

The 2019 results show one promising area of improvement: a growing number of clients are getting an earlier start on the process of pulling together the documents needed to produce the end of year report, according to MetaSource MERS Services Supervisor, Leighcie Gregg.

However, three key findings continued as significant sources of trouble in 2019:

Top 3 MERS QA Findings for 2019

-Written policies and procedures not detailed enough to comply with MERS requirements

-Failure to conduct monthly data reconciliation or doing data reconciliation that is not sufficiently thorough

-Members' internal quality assurance audits, or the audits of their subservicer, or third-party vendors, did not meet MERS standards

MetaSource: Portfolio Analysis Insufficient for MERS QA

Gregg said some of the MERS members audited by MetaSource came up short because of a practice of using portfolio analysis as the basis for a QA review of MERS compliance. The Portfolio Analysis Report is insufficient for MERS QA because it does not include all the fields necessary for MERS reconciliation, Gregg said. "The Portfolio Analysis is an excellent tool to sample from for internal QC, but it does not meet the requirements of MERS data reconciliation as it does not include the required co-borrower fields," she said.

In other cases, MERS QA compliance fell short because small departments did not have the necessary knowledge or were short-handed as the result of turnover or absences. This is where a thorough documentation of policies and procedures, including a clear audit checklist, can have a significant impact on compliance risk, ensuring that someone new can step in when necessary.

"Many people in the industry don't know the MERS requirements in depth, so they take their best guess," Gregg said. "Others were hindered by a practice of attempting to reconcile entire portfolios by hand, what we call 'stare and compare,'" she said. There are a number of tools published by MERS on its member website and vendors available who can help improve efficiencies needed to refine MERS specific QC programs, Gregg said.

Best Practices for MERS Compliance

Among the best practices recommended by MetaSource to its MERS member clients is the use of software that can identify issues and prompt corrections, in addition to generating automatic alerts when the MERS reconciliation window is open for submission.

Other best practices include:

-Reconcile accounts monthly, or at the very least quarterly, to stay on top of any needed corrections. Frequent reconciliations can help prevent the correction backlog that can be created by portfolio acquisition and/or runoff

-Start the review process early – ideally in the 3rd Quarter – so that errors can be identified, and revisions completed well in advance of the Dec. 31 due date for the eAnnual report

-For more information about MERS QA best practices, along with software and services that can help improve MERS compliance, visit the MetaSource website at

About MetaSource, LLC
Achieve breakthrough growth with a digital transformation from MetaSource. Software and services from MetaSource will optimize your processes to eliminate error-prone tasks, data silos and other inefficiencies that prevent you from achieving your true business potential. By working with MetaSource, you will get real-time, actionable data you can leverage into increased knowledge worker productivity, reduced human error, and make smarter decisions. MetaSource serves a wide variety of industries, 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. More: