ICE Eyes Mortgage Technology as it Plans Majority Stake in MERS

As part of the deal, ICE agreed to help modernize the MERS System.

Intercontinental Exchange Inc, operator of numerous global business lines, clearinghouses and exchanges, including ICE, today announced that ICE will acquire a majority equity stake in MERSCORP Holdings, Inc. (MERSCORP), according to an official corporate statement.

MERSCORP owns Mortgage Electronic Registrations Systems, Inc. (MERS) which operates a service called ‘MERS System’ that tracks changes in servicing rights and beneficial ownership interest in US-based mortgage loans.

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Development synergy

ICE and MERS have entered into a software development agreement to enhance the MERS system and make it a more modern national electronic registry for the US-based mortgage loans it tracks.

The deal is expected to help make the infrastructure – used by more than 5000 members – more robust, with potential benefits extended out to the underlying residential mortgage market in the U.S. and which could unlock efficiencies in related derivatives products in the future making them operate more fluidly.

 

This agreement brings the strengths of our organizations together to benefit the U.S. residential mortgage finance market.

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To benefit US mortgage market

Kurt Pfotenhauer Source: LinkedIn
Kurt Pfotenhauer
Source: LinkedIn

“This transaction underscores MERSCORP Holdings’ efforts to strengthen the value to its member institutions and continue to support MERS’ role as a national mortgage registry,” said Kurt Pfotenhauer, Chairman of MERSCORP Holdings, commenting in the joint corporate announcement.

Mr. Pfotenhauer added: “The investment of capital and resources from ICE will enhance the effectiveness and efficiency of MERS for our more than 5,000 member organizations.”

“This agreement brings the strengths of our organizations together to benefit the U.S. residential mortgage finance market,” said Jeffrey C. Sprecher, ICE Chairman and CEO, commenting in a statement.

“It also complements our data and technology expertise in diverse, regulated markets. We are pleased to bring our strong track record of innovation, governance and operational execution to MERS, and look forward to contributing to the evolution of mortgage market infrastructure.”

The synergy brings a commitment from ICE – which operates market infrastructure across complex and regulated financial environments globally, together with the MERS System – which is a dynamic infrastructure and transaction management solution used by home buyers, regulators, and other stakeholders including in the financial services industry.

Financial terms of the deal – which is expected to close at the end of this month – were not disclosed but were noted as immaterial to ICE.

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