In 2000, the lender extended a mortgage on a condo owner for $54,000 and took out the mortgage. The following year, the lender renewed another mortgage for $38,000 and entered into a consolidation agreement with the borrower, who consolidated the two mortgages into a single mortgage pledge, which was to be treated as a one-time mortgage with a total value of $92,000. The second mortgage and consolidation agreement was registered on the same day. In addition, the Court found that the stagnant effects of the priority of a common tax law, which was recorded years after the consolidation agreement was tabled, are due to policies. If the court found out that the consolidation agreement is not considered the first record mortgage, banks and condominium owners would simply take additional steps to satisfy the original mortgage, borrow a new mortgage and pay the additional fees necessary to achieve the same result. The applicant relied to a large extent on Societe Generale v. Charles and Co. Acquisition, 157 Misc 2d 643 (Sup Ct, NY County 1993), in which the Tribunal found that the first initial mortgage prevailed over the right to guarantee property rights. However, the Court of Appeal found that many other cases obtained the opposite result of Societe Generale and found that a consolidation agreement, registered prior to the guarantee of the condominium board, is qualified as „first mortgage of registrations“ under New York`s Real Estate Act 399-z. CEMA means „consolidation, extension and modification agreement“ and is an agreement between two lenders regarding an existing mortgage. Imagine that it takes over the seller`s existing mortgage. While you are receiving your own mortgage at current interest rates, you avoid „taking“ a new mortgage with New York State and NYC, which means you also avoid mortgage tax on that capital amount. When it comes to registering a mortgage also known as the NYC Mortgage Registration Tax, buyers are charged 2.05% of the amount borrowed for new mortgages under $500,000; The interest rate rises to 2.175% of the amount borrowed for new mortgages over $500,000 for 1-3 family and individual housing units.
Large apartment buildings and commercial buildings with new mortgages of more than $500,000 must pay 2.8% of the amount borrowed. Thus, the Court of Appeal ruled that the consolidation agreement was the first record mortgage against the premises.