- June 03, 2010
- All New York State Office Counsel, Managers and Agents
- Federal Credit Unions
On May 14, 2010, New York Supreme Court Justice Judith Gische ruled that a mortgage made to a federal credit union is not exempt from the special additional mortgage recording tax. The opinion of the Court was based on previous cases, in which the courts had determined that the mortgage tax is not a tax on property but a "privilege," and therefore not part of the tax exemption granted to federal credit unions under the Federal Credit Union Act. She also dismissed the claim that the U.S. Constitution's Supremacy Clause exempted Hudson Valley FCU from the tax.
As of now, the NYS Dept. of Taxation and Finance ("DOF") is currently reviewing whether or not to continue this exemption. Based on the foregoing case, it appears that the exemption's days are indeed numbered but no official bulletin has yet been issued by the DOF terminating the exemption.
Please be advised that in the interim, when closing a Federal Credit Union mortgage please collect the special additional mortgage tax ("quarter point") at closing and kindly refund the monies if the mortgage is recorded prior to an official change in the DOF's policy.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- NY000383 State Credit Unions
- Underwriting Manual:
- Exceptions Manual: