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What is a CEMA?

A CEMA (Consolidation Extension and Modification Agreement) is used when a borrower refinances their mortgage to save on the mortgage recording tax.

If the purchaser intends to obtain a mortgage to buy a home (but not a coop), it is possible for the seller’s mortgage to be assigned to the purchaser, thereby saving the mortgage tax on the amount of the sellers’ principle due and a portion of the New York State deed stamp tax paid by seller. A little research prior to making an offer will reveal if the seller does have a mortgage and the savings of about 2% of borrowers mortgage principle can be shared equally by the buyer and the seller.

If the process is started upon the contract signing in can be accomplished in the same time period as the purchaser will have to obtain a mortgage and should not delay the closing. CEMAs are great at cost savings and underutilized.

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