What is MERS and why am I charged a MERS fee?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Updated October 20, 2020

When you review your mortgage closing costs, you may notice a small item called a MERS fee. While the MERS fee is usually one of the smallest closing costs listed, it is important to understand all of the mortgage fees you are required to pay.

The MERS fee is the cost to register your loan in the Mortgage Electronic Registration System (now you understand where MERS comes from), which is a database used by the mortgage lending industry to track loans.

In short, the MERS system enables lenders to buy and sell mortgages more easily. In many cases your mortgage is sold from one lender to another, perhaps multiple times, after your loan closes. MERS is used by lenders to keep track mortgages as they sold and change hands.

The MERS fee borrowers pay depends on mortgage type and other factors but is usually less than $20.

So the next time you review a mortgage closing statement and see the MERS acronym, you know what it means and where your money is going.

Sources

"B8-7-01, Mortgage Electronic Registration Systems (MERS), Inc."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, March 6 2019.  Web.