On a refinance:
A client asked us whether he needed a lawyer to represent him in refinancing his condominium.
We told him he should look into getting a CEMA loan. “What’s a CEMA?” he asked. We explained that it’s an acronym for “Consolidation, Extension, and Modification Agreement.” With a CEMA, he could take advantage of a tax loophole and save on the mortgage tax (1.8% of the outstanding principal balance on mortgages under $500,000 and 1.925% if the loan is over $500,000). We told him that not all mortgage brokers, bankers, and bank attorneys actively pursue this way of avoiding the payment of mortgage tax, and that changing lending institutions would involve a lengthy and technical procedure. He hired us, and we saved him over $9,000.
On a purchase:
Our client was purchasing a co-op apartment.
As part of our services, we did our “due diligence” which included reviewing the co-op offering plan, reviewing the co-op’s recent financial statements, and reviewing minutes of the co-op Board’s meetings. The minutes revealed that the co-op board was planning an assessment that would cost the unit owner more than $10,000. In negotiating the contract, we were able to shift that cost to the seller.
Our clients were purchasing a newly-built condominium apartment.
We knew that mortgage lenders had become more cautious, so we warned our clients that even if they received a mortgage commitment, their bank could choose not to fund the mortgage if the appraisal turned out to be too low. In negotiating the contract, we advocated successfully for a very strong mortgage contingency clause. The appraisal did in fact come in below the agreed-upon purchase price. Because of the mortgage contingency clause, we were able to renegotiate the price, saving our client $20,000.