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#1286588 - 11/13/09 10:06 PM HPML Prepayment Penalties
complyyes Offline
Joined: Apr 2006
Posts: 51
When we have a HPML loan -fixed rate -are we prohibited from including a prepayment penalty provision for the first two years after consummation? Or is it stating that we can impose a prepayment penalty but for only the first two years?

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Lending Compliance
#1287537 - 11/16/09 10:34 PM Re: HPML Prepayment Penalties complyyes
dg Offline
Platinum Poster
Joined: Jan 2005
Posts: 811
Pacific NW
You are prohibited from including a prepayment penalty during the first two years following consummation.

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#1362079 - 03/22/10 09:57 PM Re: HPML Prepayment Penalties dg
rsanders Offline
Joined: Feb 2010
Posts: 72
September that is not how I read it. It says "The penalty will not apply afterthe two-year period following consummation.

I have a question also. We have a minimum interest charge on our loans. The note states "Minimum Interest Charge - I agree to pay a minimum interest charge of $10.00 if I pay this note off before you have earned that much in interest." Would this qualify as a prepayment penalty? The definition of prepayment penalty in the Reg. says "...a penalty for paying all or part of the principal before the date on which the principal is due. A prepayment penalty includes computing a refund of unearned interest by a method that is less favorable to the consumer than the actuarial method...."

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