PROPOSAL
CONSOLIDATION EXTENSION MODIFICATION (CEM)
COST BENEFIT ANALYSIS 3/08
INDEX
I
PROPOSAL INTRODUCTION
II
BASICS OF CEM
III
PROCESS
IV
PROCESS FLOW CHART
V
CEM ONLINE ANALYSIS CALCULATOR
VI
CEM COST ANALYSIS WORKSHEET (INTERNAL)
VII
CEM COST ANALYSIS WORKSHEET (EXTERNAL)
VIII
TEAM BANK OF AMERICA CONTACT SHEET
PROPOSAL
CONSOLIDATION EXTENSION MODIFICATION (CEM)
COST BENEFIT ANALYSIS 3/08
The CEM was developed by New York State to significantly reduce the cost of mortgage
tax in conjunction with financing real property located within said state. The CEM applies to
first mortgage financing only. We, at Equity Settlement Services Inc. are experts in this
process.
The proposed process will streamline the New York Refinance procedure from an
ordering and processing standpoint to ensure that the Bank of America borrower is being
directed with the most cost effective savings and that the bank itself, is being represented in
the most professional manner.
Any Bank of America refinance in the state of New York will be directed to Equity
Settlement Services Inc. for a free Cost Benefit Analysis. This analysis will be conducted by
Equity Settlement Services Inc. to determine if in fact the CEM process is beneficial from a
cost benefit as well as viable from a compliance perspective and feasible from the assigning
lender. If these factors prove affirmative for the Bank of America borrower then the CEM
process will be suggested versus a straight refinance. There are costs and extended
processing time periods associated with a CEM that need to be considered.
BASICS OF CEM
-Only in New York State.
-Eligible on first mortgage refinances.
-Reduces mortgage tax liability (which can be over 2% in certain boroughs of New York)
*mortgage tax
fluctuates by county
-Only taxed on the “new money.” “New money” is the refinance amount
(new loan amount) minus the unpaid principal balance (of current loan).
-“As a rule of thumb:” The smaller the “new money” the more advantageous a CEM would be.
-Two Types of CEM’s and Applicable Considerations:
-INTERNAL CEM: (Bank of America to Bank of America)
*No additional processing time
*Additional costs associated with preparation and recording of the CEM. (see attached worksheet)
-EXTERNAL CEM: (Existing lender assigning to Bank of America)
* Average additional processing time of approximately 4 to 6 weeks
depending on cooperation from existing lender.
* Additional costs associated with preparation and recording of CEM (see attached worksheet)
* Assignment fees from existing lenders which vary. This fee may be a fixed dollar
amount of a percentage of the existing loan amount.
* Collateral Attorney (existing lender’s attorney) fees for assignment preparation and coordination.
* Over the last 20 years Equity Settlement Services Inc. has developed extensive relationships
with virtually all lender’s collateral counsel. These relationships create the most efficient
assigning process for CEM’s.
PROCESS (see flow chart)
Step 1- Bank of America New York Loan Origination:
-Bank of America will submit New York State refinances to Equity Settlement Services Inc.
Step 2- Equity Settlement Services Cost Benefit Analysis:
-Equity Settlement Services Inc. will perform a cost benefit analysis to determine if a CEM is
beneficial from a cost standpoint.
-Equity Settlement Services will determine viability from a compliance perspective.
-Equity Settlement Services will ascertain if an assignment is feasible from the existing lender.
Step 3A- Loan Qualifies as CEM:
-If the loan does fulfill criteria and qualifies as a CEM, the file will be processed by Equity
Settlement Services Inc.
- Puleo & Delisle LLC will act as counsel representing Bank of America’s closing in
accordance with New York State Banking Regulation 38.7(a) (7).
Step 3B- Loan Does Not Qualify as CEM:
-If the loan does not fulfill criteria and therefore not qualify as a CEM, the file will be directed to
Home Focus/CRES for processing/closing.
* Cost benefit threshold savings figure to be determined by Bank of America.
CEM PROCESS FLOWCHART
1 - BANK OF AMERICA
New York Loan Origination
2 - Equity Settlement
Services
Cost Benefit Analysis
3A-Loan Qualifies
as CEM
3B-Loan does not qualify
as CEM
3A-Title to be ordered and processed by
Equity Settlement Services
3B-Title to be forwarded to
Home Focus/CRES for processing/closing
3A-Puleo & Delisle LLC.
To represent Bank of America
and close the loan in accordance with
New York State Banking Regulation 38.7(a) (7).
CEM COST ANALYSIS ORDER FORM
Email to: teambofa@equitysettlement.com
Fax to: 631-715-3449
Phone: 631-715-3448
Loan Amount
$_______________
Unpaid Principal Balance $_____________
What bank holds the current mortgage? _____________
Current loan account #?
__________________
Original amount of current mortgage? _____________
County or Zipcode of Property? _____________
Ordered by? ____________________
Fax or email back to: _________________________
**ATTACH MORTGAGE STATEMENT IF AVAILABLE
CEM ONLINE ANALYSIS
CALCULATOR
Equity Settlement Services Inc. has implemented a CEM Online Analysis Calculator to expedite the
process in determining if a first mortgage refinance is beneficial from a cost perspective for your
borrower.
The calculator can be accessed by our website at equitysettlement.com
Or contact us at:
CEMA@equitysettlement.com or teambofa@equitysettlement.com.
CEMA Cost Analysis Worksheet
Internal
SAMPLE
5 Boroughs NYC 1/2 Family (2.05% MORTGAGE TAX less $30 - lender pays first .25%)
Not Recommended for CEMA
Recommended For CEMA
IF STRAIGHT REFI.
Refinance Amount (loan amount)
$450,000.00
IF DONE AS CEMA
$450,000.00
IF STRAIGHT REFI.
$450,000.00
IF DONE AS CEMA
$450,000.00
Unpaid Principal Balance
$350,000.00
$80,000.00
New Money
$100,000.00
$370,000.00
Borrowers MORTGAGE TAX DUE at 1.80 less $30
$8,070.00
Average ASSIGNMENT FEE
APPROX CEMA RECORDING FEE
APPROX ASSIGMENT RECORDING FEE
DOCUMENT PREP. FEE (IF ANY)
TOTAL EXPENDED:
Projected Approximate Savings
$8,070.00
$1770.00
$8,070.00
$6630.00
N/A
N/A
$175.00
$175.00
N/A
N/A
$250.00
$250.00
$2195.00
$5,875.00
$8,070.00
$7,055.00
$1015.00
CEMA Cost Analysis Worksheet
External
SAMPLE
5 Boroughs NYC 1/2 Family (2.05% MORTGAGE TAX less $30 - lender pays first .25%)
Recommended For CEMA
IF STRAIGHT REFI.
Refinance Amount (loan amount)
$450,000.00
IF DONE AS CEMA
$450,000.00
Not Recommended for CEMA
IF STRAIGHT REFI.
$450,000.00
IF DONE AS CEMA
$450,000.00
Unpaid Principal Balance
$350,000.00
$80,000.00
New Money
$100,000.00
$370,000.00
Borrowers MORTGAGE TAX DUE at 1.80 less $30
$8,070.00
$1770.00
$8,070.00
$6630.00
Average ASSIGNMENT FEE
$750.00
$750.00
APPROX CEMA RECORDING FEE
$175.00
$175.00
$75.00
$75.00
$250.00
$250.00
APPROX ASSIGMENT RECORDING FEE
DOCUMENT PREP. FEE (IF ANY)
TOTAL EXPENDED:
Projected Approximate Savings
$8,070.00
$3,020.00
$5,050.00
$8,070.00
$7,880.00
$190.00
Team Bank of America
Equity Settlement Services Inc.
Phone 631-715-3448 Fax 631-715-3449
Team Email: teambofa@equitysettlement.com
Applications only: 631-715-3403