Md. Code Ann., Tax-Prop. § 12-108(g) exempts from a recordation tax certain refinance security instruments “to the extent that it secures the refinancing of an amount not greater than the unpaid principal amount secured by an existing [instrument] at the time of refinancing . . .” (Ibid. § 12-108[g]).
In order to qualify for this exemption, an affidavit signed by the original mortgagor must be recorded in which the mortgagor affirms that he is the original mortgagor and the amount of the unpaid outstanding principal of the original loan which is being refinanced. Our MD Tax Property Affidavit (Cx15803) was created to satisfy the requirements of these provisions.
There have been several court cases in Maryland that address whether multiple mortgages or deeds of trust can qualify for the tax exemption. The courts have determined that this section of the statute allows for the refinancing of multiple liens, so long as the total amount being refinanced is not greater than the unpaid principal amount of the existing liens, and all liens meet the other conditions of the statute.
To accommodate for the exemption of multiple liens, we have modified Cx15803 to change the field associated with the unpaid principal amount. Instead of field 6133 (Mortgage 1 -Unpaid Principal Balance), the field used is 18120 (Total Unpaid Principal Balance), which is the sum of 6133 (Mortgage 1 -Unpaid Principal Balance), 6134 (Mortgage 2 -Unpaid Principal Balance), and 6135 (Mortgage 3 -Unpaid Principal Balance). If there are no unpaid principal balances besides field 6133 (Mortgage 1 -Unpaid Principal Balance), the document will function as before, but the field change allows other balances to be added if desired.
This change will be in effect on January 15, 2019. If you have any questions or concerns about this change, please contact Client Support at 1.800.467.3584.