Assigned or Satisfied? The CEMA Confusion That Keeps Coming Back

In the world of New York real estate, few tools are as powerful and misunderstood as the Consolidation, Extension and Modification Agreement, better known as a CEMA.

CEMA transactions allow borrowers to avoid paying mortgage recording tax on the outstanding principal of an existing loan by consolidating the old mortgage with a new one. It sounds simple, but the recording process must be handled with precision.

Yet time and again, out of state lenders and attorneys find themselves making the same critical mistake: recording both an assignment and a satisfaction of the same mortgage.

This completely defeats the purpose of the CEMA. It also creates confusion in the chain of title and throws future transactions into unnecessary chaos. If you have ever pulled a title report and scratched your head wondering whether the mortgage was paid off or assigned, you have seen this issue play out.

The real challenge? Once both documents are on record, the timeline becomes everything. If the satisfaction is recorded first, the subsequent assignment becomes improper and can create serious mortgage tax exposure and potential priority issues. What should have been a seamless consolidation now raises red flags for title, lenders, and future buyers.

Bottom line: when CEMAs are involved, you need someone who truly understands the recording process in New York. Not everyone does.

If you are navigating a CEMA or just want to make sure your documents are recorded the right way, I am happy to be a resource when needed.