ALERT: New IDOT Law Effective July 1, 2013
Effective July 1, 2013, the law dealing with indemnity deeds of trusts and mortgages (IDOTs), supplemental instruments and refinance instruments will change. We believe that the most important change is the revision to the refinance exemption from state recordation taxes. The refinance exemption was formerly available only to borrowers who were refinancing their principal residences, but it is now available on commercial property. An IDOT can also qualify for the refinance exemption, and an existing IDOT can be refinanced by a regular deed of trust, if the grantor is the same.
The tax for all refinances is assessed on the difference between the current principal balance of the old mortgage or loan (or IDOT) and the face amount of the new mortgage. The difference is commonly referred to as "New Money".
All refinances must be accompanied by a refinance affidavit, unless the same information is included in the body or in the acknowledgment of the new mortgage. If an affidavit is used, it must be under oath and signed by the original mortgagor or the agent of the original mortgagor. It must recite that the grantor is the original mortgagor, and will need to provide the current outstanding principal balance of the mortgage, deed of trust or IDOT that is being refinanced.
If you have any questions or wish to discuss the new IDOT law, please contact:
William M. Hoffman at email@example.com or 301-961-5212
Earl E. Wise at firstname.lastname@example.org or 301-961-5280
Linowes and Blocher LLP has prepared this e-blast for general information purposes only, and the information contained in it does not constitute legal advice. This e-blast is not an offer to represent you and does not create an attorney-client relationship with Linowes and Blocher LLP or any of the firm's lawyers. You should not act, or refrain from acting, in a manner that changes your legal position based upon any information contained in this e-blast without first consulting with an attorney.