Under 1026, the CFPB meausres prepayment penalties using the outstanding loan balance prepaid. Are they talking about the aggregate total of your general prepaids such as the expenses or items that the homebuyer generally pays at closing, before they are technically due.
I guess i'm verifying my understanding of the 2% prepayment penalty trigger. Could someone give me an example?

The word "prepaid" mean that you require them to pay a penalty on a payment prior to it being due according to the note.

If you have a remaining balance of $1,000 on a closed-end loan and you assess a penalty of more than $20 - it is a trigger.

If it is an open-end credit, it would be based on the initial credit limit regardless of the current outstanding balance.

I'm still confused about aspects of this trigger. So, unless the application is for a HELOC, it’s really not possible to precalculate the loan’s prepayment penalty amount until the prepayment is actually made, correct? However, the way that I'm interpreting this regulation, you can't charge them more than a 2% prepayment penalty anyway, is that correct? And then, the amount of the allowable prepayment penalty must be calculated as part of the points and fees?