MERS (Mortgage Electronic Registration Systems) has opened a 90 day comment window for proposed changes to Rule 14, Notification to MERS of Pending Lawsuits, of the MERS Membership Rules.

The change involves the requirement of a Member to immediately post a Surety Bond or Letter of Credit if a judgment is rendered against MERS, as highlighted below.

Sec. 4(b):
Regardless of whether a Member, MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc. defended a Member Indemnified Claim
or none of these entities defended such claim, and regardless of whether MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc. had notice of the Member Indemnified Claim, if a judgment is entered against MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc. for such claim, the Member shall [immediately post a Surety Bond or Letter of Credit for the amount of the judgment pending any motions to set aside or vacate the judgment; or appeal of the judgment; or any challenges made by either the Member or MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc. to the judgment. It is the Member’s responsibility to]
pay the amount of the judgment and any other related Indemnified Payments (as that term is defined in Paragraph 9 of the MERS Membership Terms and Conditions) on behalf of MERSCORP, Inc. and/or Mortgage Electronic Registration Systems, Inc. (as applicable),....

Any comments or questions about the proposed changes to Rule
14, should be communicated to Sharon Horstkamp, General Counsel, via
email (mers@mersinc.org) or telephone (703-761-1270) no later than July 31, 2006.