Bulletin: NY000094

Dear Associates:

Mortgages affecting property in the City of Yonkers recorded since September 1, 1993 have been subject to an extra one-half of one (1/2%) percent mortgage recording tax, pursuant to Tax Law §253-d and City of Yonkers Code §92-123.

The statutory authority for this imposition expires on August 31, 1995. The legislature has not extended this statute.

The language of the statute appears to imply that the tax may be imposed on mortgages executed on or before August 31, 1995 which are recorded after the expiration date of the enabling act and the local law. However, the regulations promulgated by the department of taxation and finance clearly indicate that the tax will not be imposed on mortgages submitted for recording after August 30*, 1995 (*this date probably should be the 31st) (20 NYCRR §642.5(f)).

If a customer is scheduling a closing involving a mortgage on property located in Yonkers before September 1, 1995, the customer should be advised of the possibility of saving on mortgage tax if the closing is put off to September.

Note: We are not suggesting that you hold affected mortgages made in August off record until September 1, 1995 in order to avoid the tax. The Company will be exposed to potential liability for gap period claims if there is a delay in recording. You should collect the entire tax, including the additional imposition, if there is any chance that the mortgage can be recorded on or before August 31, 1995.

You are also advised to check the recording date stamped on affected mortgages which are submitted to the Clerk in late August 1995, after they are returned from recording. If the recording date on the instrument is September 1, 1995 or later, and the extra tax was paid on submission in August, the customer should be provided with a form MT-15 in order to attempt to obtain a refund of the possible overpayment.