Ny Cema Agreement

Cema stands for consolidation, extension, & modification agreement. Cema loans can only be made in New York State. A CEMA loan is an agreement between the existing lender and the new lender to combine two or more loans for a new consolidated loan. This is often used by existing homeowners who want to refinance their home or by potential buyers who want to save mortgage taxes. On 9 April 2008, the Office of General Counsel issued the following opinion, in which it adopted the position of the New York State Department of Insurance. The applicant also indicated that consumers would learn something from the new lender about the product and that the new lender would recommend a title agency and the Agency`s ability to offer the product to the “secured” third-party company. If the consumer chooses to purchase the warranty, he pays a one-time non-refundable service fee to the third party`s warranty company. This fee is due at the time of purchase of the guarantee and not at the time of the conclusion of the loan. At Better Mortgage, your credit manager will work with you to conduct a preliminary analysis to see if a CEMA or refinancing is less expensive. Once your loan is blocked, our bank lawyer will contact you to confirm any savings. If you change your mind after blocking, you can switch from CEMA to refinancing free of charge. A CEMA also involves additional requirements, namely approval from your current lender – which means it takes longer to complete. A traditional refinancing takes on average ~30 days to close, while a CEMA usually takes ~75 days to close.

If you`re in a hurry to refinance yourself, it may be helpful to bypass a CEMA. For example, if you have a $200,000 mortgage and you refinance yourself with a $300,000 loan and you live in New York City, you would normally have to pay a tax of $300,000 x 1.8 percent (2.05% minus 0.25% paid by the lender) or $5,400. With a CEMA loan, you would only pay the 1.8% tax on the $100,000 difference, which is a tax of only $1,800. To kick-start the CEMA process, borrowers sometimes have to pay an upfront fee to their existing lender.