Category Archives: Mortgage

How Do New York CEMA Transactions Work?

If you have head the term “CEMA” or “CEMA” transactions before, it is possible that you might currently be interested in getting a mortgage loan. New York CEMA transactions basically refer to a law that says that the borrower of a mortgage loan secured by real estate may be exempt from recording tax by using taxes previously paid against the property. New York CEMA transactions are put in place in order to promote savings on taxes but they do have a downside, which is the cost and the length of the process associated with these transactions.

Let’s clear the air first, CEMA stands for Consolidation Extension and Modification Agreement and basically what it is, it is a document that enables consumers to use Section 255 of the New York State Law in order to reduce their mortgage tax in purchasing or refinancing transactions. Generally speaking a CEMA transaction will be used to decrease the cost of the total tax paid on a mortgage for both the borrower and the lender, thus reducing the total amount paid on the mortgage over time. A CEMA transaction can –and will reduce the total amount both parties have to pay on these specific mortgage transactions by combining old and new liens.

If you are currently considering using this document to reduce the total tax paid on your mortgage transaction then the assistance of an experienced and educated attorney can be of extreme value when it comes to securing your CEMA. Guidance along the way and knowledge of the regulations and laws regarding CEMA are a common necessity in these real estate transactions. Remember that a CEMA transaction must be used only in the correct situations and in certain counties, so the valuable advice of an experience firm can help make the difference.

Who Are the Essential Parties Involved in a CEMA Transaction?

There are several different parties that may be involved in your New York CEMA transaction. This type of transaction involves the assignment of a seller’s mortgage to a purchaser through the sale transaction. When the existing mortgage is assigned to the new borrower during the closing, it will be amended to reflect the terms of the new mortgage.

There are many different situations where a CEMA can be utilized. It can be used in any purchase sale transaction outside of co-ops. The transaction must include an outstanding mortgage and a situation where the purchaser is borrowing money to finance the purchase. The seller’s lender has to be willing to assign the current mortgage and the purchaser’s lender also has to be willing to take the mortgage in assignment.

The critical parties involved in a CEMA transaction include the new lender, the current lender, and the attorneys for both the purchaser and the seller. It is important that both the seller and the purchaser involved in the transaction have legal representation present in order to ensure that everyone is clear on their responsibilities and rights. Coordinating the assignment regarding the existing mortgage with amendments reflect the terms of the new buyers commitment requires an experienced attorney. The lawyers present for both the seller and the purchaser are critical for coordinating the assignment.