CEMA is an acronym standing for Consolidation Extension and Modification Agreement. This is a type of document that is designed to modify the terms of a mortgage agreement. In some cases, it can also be used to merge two mortgages against the same property, as a means of consolidating it. CEMA is commonly used for refinancing purposes.

A scenario describing the use of a CEMA is when a lender X has an unpaid mortgage balance of $125,000 from an initial principal of $200,000. In such a scenario, the CEMA is used to assign this balance to lender Y. The borrower (X) then gets a mortgage representing the balance ($75,000) which is consolidated with the initial mortgage attached to Y. The two mortgages are then consolidated to make a total of $200,000.

Though there are many reasons why an investor would need to apply for a CEMA, it is important to weigh the pros and cons of doing so before proceeding with it. It can be a powerful tool to gain significant credit, but one has to compare the cost of a CEMA processing with the potential savings of not going through with it to find out if its viable.

The complexity of application for and processing of a CEMA requires an attorney to be present for an explanation of how it works, whether you are eligible for applying for it and how much it will cost you. The only way to responsibly apply for the CEMA is to ensure that you understand all these technical facts with the help of an attorney before proceeding.