Mortgage Documents: First Mortgage, Mortage Note, Satisfaction of Mortgage, Affidavit For Exemption Under Sec.253 of the New York State Tax Law - Natural Person Affidavit - New York Forms (9 Pages)

First Mortgage
The Mortgage establishes a lien against real property giving the lender the right to take the property in foreclosure if there is a default in payments. It is recorded in the county in which the property is located. It is always executed with an accompanying Personal Loan Note.
The status of a Seller financed Purchase Money Mortgage is superior to that of a third party lender generated mortgage even if executed contemporaneously. As a result of the superior status, lending institutions will require the borrower to execute a mortgage subordination document or place language in the seller financed mortgage subordinating the seller held mortgage to the third party purchase money mortgage.
Mortgage Note
Financing the purchase of real estate involves the execution of a Mortgage by the borrowers which is recorded in the land records office of the County where property is located . The Mortgage secures the indebtedness  by placing a lien on the property.  A  Loan Note (sometimes called a Bond) is always simultaneously executed  to reflect borrower’s personal guaranty  of repayment of the loan. Lender may exercise its rights under this personal guaranty if the property itself is currently worth less than the indebtedness reflected in the Mortgage.
This document describes parties to loan,the property, the amount of loan, the term of loan, the interest rate, whether it is an interest only loan or principal plus interest, whether interest is a fixed rate or variable rate.
Caveat: The Loan Note is not recorded. It should never be executed in duplicate to avoid fraudulent claims by one improperly coming into possession of the Note. If Lender insists, mark “COPY” on bold letters on the document.
Satisfaction of the Mortgage
While, In New York, the full pay off of a mortgage debt  is manifested by a Satisfaction of Mortgage document in recordable form,  in other states it may be referred to as Release or Discharge of Mortgage loan. The lender will respond to a request for payoff figures reflecting principal  amount due and per diem interest on a certain date.  Upon receipt of  this payment, the lender will provide the Satisfaction document which specifically describes the original Mortgage, the borrowers, the address of the property, the liber, page and County Clerk’s or Register’s office in which Mortgage was recorded. The Satisfaction will also contain date original Mortgage was executed and recorded. If this open Mortgage has been modified, consolidated, extended, assigned, the Satisfaction must specifically contain each assigned or modified mortgage in the chain with its recording information.
Caveat: It is crucial that the Satisfaction be recorded so as not to continue to show up, in a title search, as a lien or encumbrance on the property.
Suggestion: In letter to lender  of request for mortgage payoff information, additionally  request whether there is remaining escrow in a tax escrow account (where real estate taxes are paid by lender), last tax paid and if balance of escrow can be credited against the final payoff amount due.
Affidavit For Exemption Under Sec. 253 Of The New York State Tax Law - Natural Person Affidavit
While mortgagor, borrower is assessed with the bulk of the prevailing mortgage recording tax (check with local county clerk or city register office for current rate), the institutional lender must pay 1/4 of 1% (.0025) of the mortgage tax.
A natural person lender (such as found in a seller financed mortgage) may request a lender's tax exemption pursuant to Tax Law Section 253 (1-a). The Mortgage must recite "Mortgagees are natural persons and the premises are improved by one to six family residential units, each with separate cooking facilities. Request for exemption pursuant to Tax Law 253 (1-a) is made."
If the mortgage forms the basis of a consolidation, modification and extension of existing mortgage, the exemption will be applicable only to new funds and not those remaining funds which are simply being modified as to interest rate, terms, etc.. 
Author:
CLAIRE SAMUELSON MEADOW, Esq. is in the private practice of law, concentrating in real property transactions. In addition, she works on title matters as a consultant, attorney and representative for a New York based title agency. She is the author of numerous real estate articles distributed to lawyers, and she has appeared on the General Practice “Hot Tips” panel at the New York State Bar Association’s Annual Meeting. Recently, she has been presenting Continuing Legal Education-credit programs on real estate and title matters to the Westchester County Bar Association, the New York County Bar Association and the National Law Foundation. Mrs. Meadow authored the residential real property chapters of the New York Lawyer’s Deskbook and Formbook for more than 12 years.
Before entering private practice, Mrs. Meadow was a staff attorney in the Enforcement Division of the Securities and Exchange Commission’s New York regional office. She is a Phi Beta Kappa, cum laude graduate of Hunter College, Class of 1959, and a graduate of Columbia Law School, Class of 1962, where she was a recipient of a Moot Court Scholarship.
Mrs. Meadow is listed in Who’s Who in American Women and Who’s Who in American Law. She is a recipient of a Westchester County Woman of Achievement Award and a Certificate of Special Congressional Recognition from Congresswoman Nita M. Lowey for “outstanding and invaluable service to the community.”
Mrs. Meadow was a founding member of the New York State Women’s Bar Association, Westchester County, and its first recording secretary. She is also a member of the New York State Bar Association, Real Property Committee; the Westchester County Bar Association; and the New Rochelle Bar Association.
Don’t think this attorney has a narrow horizon. She chaired the Westchester Women’s Bar Association Annual Golf Outing for six years causing it to become such a popular community event that, in some years players had to be turned away.
Mrs. Meadow welcomes inquiries by new lawyers and general practitioners concerning basic real estate or title matters. She may be contacted at 914-834-6472.