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Blog
Feb 16

Real Estate Insights: How Lockdowns Can Affect Closing

Every few weeks, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.

With talks of another New York City lockdown looming, one clock that does not stop is the clock on maturing loans. Accentuating matters is the effect that the pandemic has had on collections, with many office employees working from home, a number of residents moving out for more space, and the lack of tourism.

I recently caught up with Yaniv Cohen and Joseph Hach of Leviathan Capital, who are busier than ever helping multifamily and mixed-used owners navigate thus situation. They referenced two recent transactions.

The Deal

A $3MM mixed-use refinance in Chelsea and a $30MM multifamily refinance in Tribeca.

New York County (Tribeca)

Title Insurance
          Loan Policy $9,376
Title Fees: $800+
Mortgage Tax: $84,000
County Recording Fees: $500+
Title Grade: N/A

New York County (Chelsea)

Title Insurance:
          Loan Policy $72,976
Title Fees: $800+
Mortgage Tax: $840,000
County Recording Fees: $500+
Title Grade: N/A

Cornerstone Insight

Because of lockdowns and slowdowns, searches and examinations are taking longer. What used to take 3-5 business days can now take 10-15 business days.

If court offices are closed, required filings cannot take place, holding up the process. If county clerks are closed, required recordings or resolutions cannot be put on record, which also slows the process.

Lenders aren’t extending deadlines to make up for the delays, making it more important than ever to start the buying or refinancing process as soon as possible. This is especially true when a loan is maturing and needs to be refinanced.

To avoid additional delays, make sure that the prior mortgage(s) and mortgage satisfactions are on record. Also, ensure that any judgments against the property or owners (parking tickets, creditors) and property taxes/water bills on the property are paid and made whole.

If you have any questions about streamlining the buying/refinancing process diligence or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.