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Question Is it legal to charge a mortgage prepayment penalty?

Answer The ability of an institution to charge a prepayment penalty must be contained in the mortgage note. State banking law and regulation provide that a prepayment penalty may be imposed only during the first year if the interest rate remains fixed for a period of at least five years.

Back Contact: Consumer Representative
Phone: 1 800 334 3360 or Fax: 1 212 618 6570

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