Are pre-payment penalties allowed in MD on residential mortgages? If not where can I find information stating this?

Pre-payment penalties are NOT allowed on residential mortgages in Maryland but I do not have the specific site at my finger tips. If I come across it I will post it for you.

it is my understanding that prepayment penalties are verbotten for home mortgage transactions and the cite is in the Maryland Commercial Law http://mlis.state.md.us/cgi-win/web_qu_cy32.exe?gcl&1-101

according to http://www.dllr.state.md.us/finance/consfaq.html

Quote:

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Are prepayment penalties illegal in Maryland?
Not exactly. Prepayment penalties may be permissible under certain Maryland law and are subject to certain limitations. However, many Maryland laws do not permit prepayment penalties. The language in the contract governs and must be reviewed carefully. A prepayment penalty may be allowed depending on the contract.

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it is my understanding that we can charge pre-payment penalities on commercial real estate transactions only

Does anyone know if the pre-payment penalty prohibition in Maryland applies to OCC chartered banks, or are we exempt from complying with this rule because of OCC pre-emption?

Boy- its been a lot of years since we were an OCC bank, so I am a little rusty on this. To the best of my recollection, the only place national banks may override MD state law is prepayment penalties on ARMs. When we were an OCC bank we hired some folks to head up our subprime loan area who were originally from a mortgage company. They were used to operaton under the Parity Act, and when they found out that did not apply to national banks and they had to abide by Md law, they were a bit upset. However, I do remember something when I was researching this that had to do with ARMs. You may want to begin your research there.
BC

Here is an article just this week in the Baltimore Business Journal.

http://msnbc.msn.com/id/5964199/

I hope the info helps.

good catch! an alternative link for the same story Financial giant sues Maryland banking czar

Thanks to all. That information helps alot!!!

How can I fin out how much the pre-payment penalty is

I have questions about pre-payment penalty, I sold my house 3 months prior to the expiration date of my prepayment penalty expire and I inquired my previous lenders if I can be exempted to prepayment of $9,000 because my anniversary is just 3 months away from the date of the settlement, but still the lender still charge me of the huge amount and I found out that MD should not have prepayment penalty, is this true, if it is, can I still after my previous lender and maybe I can have a refund of the amount that they collected when I sold my property?

Sincerely,
an 83 yr old women in MD

maryland does allow a partial prepayment penalty on 1sts and 2nds

massachusettes recently went from allowing a partial prepay to not allowing a prepay at all. maybe you people are getting MD and MA confused.

You should review your prepayment penalty contract/disclosure. In some instances, selling your house will not invoke the prepayment penalty.

When was the most recent law passed regarding prepayment penalties on residential realestste in Maryland? Where can I find a copy of this law?

This story says the the State lost a Law Suit in Federal Court over this.

http://www.baltimoresun.com/business/bal-bz.mortgages19apr19,1,2366376.story?coll=bal-business-headlines&ctrack=1&cset=true

I think you can for some loans but there are restrictions on the prepay and the rate. You should check with a good attorney like Steve Lovejoy in Towson, MD.

It also depnds on who it making the loan. If the loan is made by a Federal bank they can charge Pre-payment penalty. It he loan is made by a Licencee of the Commsioner of Financial Regulation and is not under the control of a Federal bank then they can only charge a pre-payment penalty if the Note is written under the Annotated Code of Marylad Commercial Law 12-1, and it can only be charged within the first 3 years , and the original rate of interst cannot exceed 8%.

Does Maryland allow prepayment penalties on fixed-rate mortgages?

Does Maryland Law allow prepayment penalties on ARM Loans for residential mortgages?

i found a site that tells about MD penalties....
www.docmagic.com/compliance/prepay/penalties.jsp
Md does allow penalties if the interest rate is under 8% and its not prepaid within 36 months. hope this helps

Maryland State Matrix may have something on this. My understanding is if a mortgage was before 7/1/03 THERE IS NO PRE PAYMENT PENALTY, after 7/1/03 it may.