CEMA, or Consolidation, Extension and Modification Agreement, mortgages are available in the state of New York and help customers reduce tax costs, states Master Mortgage. CEMA is not a specific type of loan, but rather an agreement applied to the loan that reduces taxes owed, states the New York Times.
With a CEMA loan, when the customer refinances, the mortgage or recording tax owed is only the difference between the original mortgage and the new loan, states NYC Mortgage. This works because rather than issuing a new loan, the lender modifies the original mortgage, making the refinance terms an extension of that loan. Without CEMA, borrowers must pay the recording tax based on the entire loan amount.