of an MBS security. Often market participants do not concur, resulting in large differences in quoted prices for the same instrument. Practitioners constantly try to improve prepayment models and hope to measure values for input variables implied by the market. Varying liquidity premiums for related instruments and changing liquidity over time make this a difficult task. One factor used to express price of an MBS security is the pool factor. Recording and Mortgage Electronic Registration Systems One critical component of the securitization system in the US market is the Mortgage Electronic Registration Systems (MERS) created in the 1990s, which created a private system wherein underlying mortgages were assigned and reassigned outside of the traditional county-level recording process. The legitimacy and overall accuracy of this alternative recording system have faced serious challenges with the onset of the mortgage crisis: as the US courts flood with foreclosure cases, the inadequacies of the MERS model are being exposed, and both local and federal governments have begun to take action through suits of their own and the refusal (in some jurisdictions) of the courts to recognize the legal authority of MERS assignments. The assignment of mortgage (deed of trust) and note (obligation to pay the debt) paperwork outside of the traditional US county courts (and without recordation fee payment) is subject to legal challenge. Legal inconsistencies in MERS originally appeared trivial, but they may reflect dysfunctionality in the entire US mortgage securitization industry. See also A notes Bank of America Home Loans Dollar roll Lewis Ranieri, the father of MBSs New Century United States housing bubble References Bibliography External links Vink, Dennis and Thibeault, André (2008). "ABS, MBS and CDO Compared: An Empirical Analysis" The Journal of Structured Finance MBS Basics by Mortgage News Daily, MBS Commentary What Is a Mortgage-Backed Security? by Chris Wilson, in Slate Magazine TBA Trading and Liquidity in the Agency MBS Market, by the Federal Reserve Bank of New York Structured finance United States housing bubble