The STM2 has two modes: single wire which requires the switch to have a DC output where the polarity is reversed to indicate through/out position (the switch controllers use red/green LEDs), and two-wire mode where a voltage on either of the two inputs provides the switch position to the STM2.
IIRC, the MTH Realtrax switches use incandescent lights so you'll need the two-wire mode. Try the two-wire Atlas example in the owner's manual.