Cema.org http://www.cema.org Covering NY CEMA Mortgages Wed, 21 Dec 2011 16:10:51 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 What is a CEMA Mortgage? http://www.cema.org/what-is-a-cema-mortgage/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-a-cema-mortgage http://www.cema.org/what-is-a-cema-mortgage/#comments Tue, 04 Oct 2011 18:28:32 +0000 admin http://cema.org/?p=18 Read more »

]]> CEMA stands for a Consolidation Extensions and Modification agreement. They are used primarily in New York as a tool to save money on mortgage tax recording costs. With houses in New York, particularly in the lower portion of the state at an all-time high, these savings can be in the tens of thousands. Its important to understand that this is a tool used mainly by professional real estate brokers. It is usually advisable that you talk to a professional when applying for a CEMA mortgage in the state of New York.

A CEMA mortgage works by taking the old mortgage (the existing mortgage sometimes called the old money, and using it towards the calculation of the total loan amount and the difference between the two (the new money). So for a total loan amount of $100,000, and an existing mortgage you $80,000, the new money would be $20,000. The recording tax costs are then calculated against $20,000, rather than the $100,000 total loan amount. You can see that this would result in significant cost savings for the borrower.

When considering whether a NY CEMA is right for you, its important to weight the costs of the process (legal doc fees, lender fees, etc) against the savings associated with the CEMA mortgage. If your savings outweigh your costs, its a no brainer. You might consider a CEMA Refinance, which has its own procedures and documentation.

]]> http://www.cema.org/what-is-a-cema-mortgage/feed/ 0 CEMA Refinance http://www.cema.org/cema-refinance/?utm_source=rss&utm_medium=rss&utm_campaign=cema-refinance http://www.cema.org/cema-refinance/#comments Tue, 04 Oct 2011 18:27:57 +0000 admin http://cema.org/?p=16 Read more »

]]> As we talked about before, a CEMA mortgage helps borrowers save a significant sum in recording tax costs. One of the primary vehicles for this is the CEMA refinance. To illustrate how a borrower would take advantage of a CEMA refinance, lets look at a hypothetical example.

Let’s say we have current mortgage holder that is able to offer CEMA products (not all lenders are accredited through the state and capable of offering CEMA mortgages). The process generally follows a work-flow, dictated by the documents required by the lender and the state.

1.  The legacy mortgage must be issued by either a new lender, or the existing lender. If it is the former, the original mortgage must be assumed by the new lender which requires special documents and legal processes.

2.  The final consolidated amount is calculated by looking at the unpaid portion of the principal balance on the old mortgage, and comparing it against the new loan amount.

3.  The original lender signs over the original not to the new lender. This requires obvious legal documentation by both parties.

4.  The CEMA form (Consolidation Extension Modification Agreement) are prepared by the new lender’s attorneys or legal department.

5.  The new mortgage is issued, and recording tax costs are calculated against the gap rather than the original mortgage amount.

The CEMA refinance process can take a few weeks, depending upon the speed at which legal documentation is assembled. As the new lender typically receives its payment (in the form of fees taxes onto your mortgage), it is in their best interest to close quickly and handle the matter in an efficient and effective manner.

]]> http://www.cema.org/cema-refinance/feed/ 0