Magazine article Mortgage Banking

Mortgages CAN

Magazine article Mortgage Banking

Mortgages CAN

Article excerpt

The Internet Corporation for Assigned Names and Numbers (ICANN), Marina del Rey, California, and the Mortgage Electronic Registration System (MERS), Reston, Virginia, at first glance, don't seem to have much in common. MERS, operating in the mortgage-backed securitization market, and ICANN, managing an essential part of the Internet's infrastructure, are certainly dry and complicated topics. The internal processes of each are not typically discussed at cocktail parties and the raison d'etre of each is not commonly understood. But both have been in the media of late. MERS tends to pop up in reports about the mortgage foreclosure crisis and ICANN is in the media around the controversial segregation of adult websites from the.com world to .xxx. So what exactly do these two entities do and what could they possibly have in common?

For one, both MERS and ICANN assign and register a unique number to information. ICANN provides a directory for the Internet in the same manner that the Yellow Pages provide telephone numbers. The ICANN directory allows computer users to surf the Internet, find Web addresses and verify that the Web address is unique. How? Every computer connected on the Internet has a unique address known as an Internet Protocol (IP) address. All websites live on a computer with a specific IP address. In order to connect a user to a website, networking protocols use the IP address just as telecommunication companies use a telephone number.

The string of numbers that constitute an IP address is not intuitive or easily remembered, which is fine for computers but not humans. This is where ICANN comes in, by providing the Domain Name System (DNS) that helps humans reach websites with familiar names. With DNS, instead of typing 192.0.32.7, a user types www.icann.org to reach ICANN's website. When a mnemonic domain name such as www.mortgagebankers.org is typed into a Web browser, the user is correctly directed to the Mortgage Bankers Association (MBA) site. In order to obtain a domain name and verify its uniqueness on the Internet, one must register the domain in the DNS. ICANN has the oversight responsibility for the top-level distribution of domain names.

In a similar manner to DNS, MERS maintains a directory of mortgages by associating a unique number to a loan, called the Mortgage Identification Number (MIN). The MIN is a unique 18-digit number used to track a mortgage loan throughout its life, from origination and at closing, to securitization to payoff or foreclosure. Every system that touches the mortgage during the life of the loan may have internal identifiers; however, the MIN is used as a method for lenders, servicers, document custodians and secondary investors to uniquely identify and transfer information about the loan. Often the MIN number is printed on mortgage documents. In this way, the MIN is the unique domain name that is commonly used to link to the loan file. On the MERS eRegistry, the MIN is the unique identifier for an electronic mortgage by which the owner of the loan, the servicer and the document custodian are associated.

So, how might the mortgage banking industry benefit by using ICANN as a case study? ICANN was formed as the result of questioning the transparency of the process by reviewing the oversight authority and the manner in which domain names were distributed. Before the establishment of ICANN, a single entity--the U.S. …

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