Millennium Abstract Corp.

Update on Recording Documents Against Unapportioned Lots and Affidavits for NYC Mortgage Recording Tax Aggregation

The City Register has advised the Land Title Association that it will not reject instruments affecting only part of a lot, where there is no change in ownership.

            Further, with regard to NYC mortgage tax aggregation, the principal amounts secured by different mortgages encumbering property in the City of New York can be aggregated to determine the applicable rate of tax if the mortgages from part of the same or related transactions and have the same or “related” mortgagors are part of a related transaction.

            This rule has presented problems in refinance transactions where an existing mortgage is paid off at a closing, when this “existing” mortgage is not satisfied of record before the new mortgage is recorded.  In such a case, if the two mortgages are aggregated amount results in the total mortgage amount to be subject to the higher mortgage tax rate.

            However, the City Register has agreed to accept an affidavit, and not aggregate and apply the higher mortgage tax rate, if the mortgage of record has been paid and a satisfaction of that mortgage amount to be subject to the higher mortgage tax rate.

Lenders Obligation to Discharge Mortgages

            On August 9, 2005, Governor Pataki signed Chapter 467 of the Laws of 2005, which amends Real Property Actions and Procedures Law Section 1921 regarding a lender’s obligation to discharge mortgages that have been paid off by or on behalf of mortgagors.  This amendment puts teeth into former sections by making the mortgagee liable to the mortgagor for the failure to present a certificate of discharge in a timely manner.

            The mortgagee will be liable to the mortgagor in the amount of 500.00 if the certificate of discharge is not presented for recording within 30 days of the payment of principal and interest on an outstanding mortgage.  That amount will increase to $1000.00 if the certificate is not presented within 60 days and will increase to $1500.00 if not presented within 90 days of payment.  A copy of the bill will be made available to you upon request.  This bill takes effect on November 7, 2005.

            Unfortunately, the bill does not give a method by which a mortgagor may enforce such penalties.  It remains to be seen whether this amendment will encourage lenders to prepare and present certificates of discharge in a timely manner, but now there is a remedy available to borrowers who choose to pursue such lenders, at least in theory.

Hurricane Wilma

Hurricane Wilma is on her way to Florida, then up the east coast.  A weatherman said it would cause tremendous rain and flooding in New England.  I believe he said "devastating rain."  This will surely have a major impact on our economy.  The damage will be costly to insurance carriers who will raise rates to cover losses.  No matter what happens in this world, people have to live somewhere.  I believe that the real estate industry will experience continued strength in financing and turn over.  Whereas home prices may decline, I believe sales and financing will remain strong for years to come.

ACRIS

We have been advised this morning that ACRIS will no longer accept partial lot filings.  A sub-division must be completed prior to closing.  It seems that unilateral and broad changes are being implemented without consideration to real life by the NYC Department of Finance.  Our real estate system and industry vulnerable to these uninformed and unqualified decision makers.

Do you Blog?

Well, do you?