The Words “Consolidation Extension and Modification” refer to what exactly?
Consolidation refers to the fact that two separate mortgages (Gap and Existing) are being Consolidated to form a single lien; Extension refers to the fact that the existing note (which probably has less than 30 years remaining) will be extended to match the term of the new loan. Modification refers to the fact that the terms of the old note and mortgage (the interest rate, e.g.) are being modified according to the terms of the new loan. Question: What if the PUB is greater than new loan amount? Can I still do a CEMA? Answer: Yes. If the PUB is greater than the new loan amount, the borrower will probably be bringing money to the closing table. In this case, there will be no gap note and no gap mortgage. There will be no mortgage tax due at all. This is called a “straight mod” or and “EMA” since there is no consolidation occurring due to the fact that there is only one mortgage, rather than the normal two. Question: What is the lender’s quarter point? Answer: In addition to the borrower’
