A commercial borrower in New York is obtaining a $5 million mortgage that will be assigned to multiple lenders through participation agreements. How does this affect the mortgage recording tax calculation?
Correct Answer
C) Tax is due on the full $5 million mortgage amount regardless of participation
New York mortgage recording tax is calculated on the face amount of the mortgage being recorded, regardless of whether the mortgage will be participated out or assigned to multiple lenders. The tax is due on the full $5 million when the mortgage is initially recorded.
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Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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