Consolidation Extension Modification Agreement

The Consolidation Extension Modification Agreement (CEMA) is a program used in the state of New York. New York requires borrowers of home loans to pay a mortgage tax. This agreement allows borrowers a way of avoiding all or some of the tax.

Explanation

CEMA is a program designed for avoiding the payment of New York's mortgage tax. This mortgage tax is imposed on borrowers who purchase homes in New York. A specified percentage of the borrowed amount is charged to the borrower. This tax is statewide, although the percentages vary by county.

Purpose

This agreement was created to alleviate the mortgage tax problem in the state. Customers must apply for this modification through their lending bank. Although some banks do not honor this policy, many do.

Details

CEMA works by consolidating a new loan with a previous one. This offer only benefits customers who had a home, sold it, then purchased a new one. When a borrower is approved for CEMA, the old loan is replaced with a new one. The terms of the loan are extended and modified. The borrower only pays the imposed mortgage tax on the difference in loan amounts.

References

• Freddie Mac: New York Consolidation, Extension and Modification Agreement
• NYC Mortgage: CEMA - Consolidation, Extension and Modification Agreement, How to Save on New York Mortgage Tax
• Maximum Title: Consolidation, Extension and Modification Agreement