ordering the new york cema in encompass - ellie...

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Ordering the New York CEMA in Encompass When it comes time to refinance, homeowners often try to avoid paying a mortgage tax for a second time. Homeowners in New York State can avoid paying the mortgage tax again by attaining a New York Consolidation, Extension, and Modification Agreement or “CEMA”.

The New York CEMA is utilized for refinances in lieu of the traditional cancellation of the old mortgage Note and release of the lien. It enables borrowers with mortgages secured by property located in New York State to reduce the amount of the mortgage recording tax paid in connection with the refinance by combining two or more loans into a new consolidated loan. Tax on the outstanding mortgage balance has already been paid so the Mortgage tax is waived on that amount. In essence the new refinance loan takes the balance left on the existing loan and consolidates it with any new monies if it’s a cash out, or no new monies if they are just lowering the rate or term of the loan. Transferring the old collateral to the new collateral through an assignment avoids paying the mortgage tax a second time. No cancellation will be filed on the existing mortgage. The homeowner’s credit report will reflect the new CEMA mortgage and will report the existing mortgage as transferred.

CEMA input fields are provided on the State Specific Information – New York input form in Encompass where you can enter refinance loan data and information about the previously recorded lien(s) subject to consolidation. When ordering closing documents, this data will be populated to the printed Consolidation, Extension, and Modification Agreement output form and the associated disclosures (Exhibit A - Exhibit D, Consolidated Note, NY Section 255 Affidavit) required for New York CEMA loans.

To Access the CEMA Input Fields and Order a New York CEMA:

1. In Encompass, open a loan file, and then ensure the Subject Property is located in New York State.

September 2014 Generating the New York CEMA in Encompass of 10

2. On the Forms tab, click State-Specific Disclosure Information.


3. On the State Specific Information – New York input form, scroll down to the CEMA section, and then enter the amount of the new loan (New Money Amount; field ID DISCLOSURE.X993) OR the amount of the previously existing mortgage (Previous Mortgage Amount 1; field ID DISCLOSURE.X994).

Enter the New Money Amount if this transaction is a cash-out refi.

Enter the Previous Mortgage Amount 1 for all refinance transactions.


4. Enter the remaining information about the new loan or previous mortgage as required, and then click the Save icon to save the form data.

5. To order closing documents, on any of the Closing forms in Encompass (excluding the 2010 HUD-1 and Closing Vendor Information forms), click the Order Docs button on the top-right of the form.

6. In the Select Documents pop-up window, select the check box for the following documents in the list:

NY Note - The title of the Note document varies based on the loan features. For example, for loans with a fixed rate the document is titled New York Fixed Rate Note. For loans with an adjustable rate, the document is titled Fixed/Adjustable Rate Note.

NY Mortgage

NY Section 255 Affidavit

NY Consolidation, Extension, and Modification Agreement

7. Click Print, and then click Print Selected Documents to print the selected documents.

OR

Click Add to eFolder to add electronic copies of the closing docs to the loan file

OR

Click Send to send selected documents to the borrower or other recipients using the Secure Form Transfer tool.

Note: For detailed instructions about ordering closing documents, refer to the Using the Encompass Docs Solution white paper or the The Closing Process topic in the Encompass online help.


CEMA Documents

When you select the required documents in the Select Documents pop-up window, the following disclosures are generated:

Consolidation, Extension, and Modification Agreement


Exhibit A

Exhibit A generates when printing the Consolidation, Extension, and Modification Agreement. Exhibit A provides a list of liens subject to consolidation. Lien data entered in the State Specific Information – New York input form’s CEMA fields is printed to this disclosure. If no data is entered, N/A is printed to this disclosure.


Exhibit B

Exhibit B generates when printing the Consolidation, Extension, and Modification Agreement. Exhibit B provides the property’s legal description (field ID 1846), mineral rights and/or abbreviated legal description (field ID 1883), and the Assessor’s Parcel Number (field ID 1894). The information printed on this disclosure is based on the corresponding data entered on the Property Information input form in Encompass.

Exhibit C (NY Note)

Exhibit C is an optional Exhibit which will generate when the NY Note document is printed. (The title of the NY Note document varies based on the loan type. For example, if the loan features a fixed rate the document is titled NY Fixed Rate Note.) Exhibit C is a copy of the Consolidated Note (and any applicable Addenda or Riders) with the CEMA language printed at the top and EXHIBIT C printed at the top of all applicable pages. The loan amount reflected on the disclosure is the total new or full loan amount (new money amount plus unpaid balance on the existing mortgage (including funds for PMI/MIP financing) entered in the Loan Amount field (field ID 2) in Encompass).

Note: Contact Ellie Mae Technical Support to opt-in to receiving Exhibit C with your NY Note for CEMA loans.


Exhibit D (NY Mortgage)

Exhibit D generates when the NY Mortgage document is printed. Exhibit D is a copy of the Consolidated Security Instrument (and any applicable Riders) with the CEMA language printed at the top and EXHIBIT D printed at the top of all applicable pages. The loan amount reflected on the disclosure is the total new or full loan amount (new money amount plus unpaid balance on the existing mortgage (including funds for PMI/MIP financing) entered in the Loan Amount field (field ID 2) in Encompass).


NY Section 255 Affidavit

The NY Section 255 Affidavit identifies the original first lien (field ID DISCLOSURE.X994), the new money amount (field ID DISCLOSURE.X993), and the consolidated loan amount (field ID 2). This disclosure is used to officially request that the new CEMA be exempt from taxation pursuant to Section 255 of Article XI of the Tax Law of the State of New York.


Additional New York CEMA Disclosure Package Details

The Subject Note, applicable Addenda, Security Instrument, and applicable Riders will all reflect the new loan amount entered in the New Money Amount field (field ID DISCLOSURE.X993) in the CEMA section of the State Specific Information – New York input form.

The Consolidated Note, applicable addenda, Security Instrument, and applicable Riders will all reflect the consolidated loan amount (new money amount plus unpaid balance on the existing mortgage (including funds for PMI/MIP financing) entered in the Loan Amount field (field ID 2) in Encompass).