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JBaxLaw, Lawyer
Category: Real Estate Law
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looking into my girl friend mortgage company she had "argent"

Customer Question

looking into my girl friend mortgage company she had "argent" had a prepayment penalty of $30,000 when she refied. I looked at the docs and the papers that state a prepay penalty was not filed in the reg of deeds can she sue for the money back?
Submitted: 3 years ago.
Category: Real Estate Law
Expert:  JBaxLaw replied 3 years ago.

I am a professional here to assist you. I appreciate your use of this service.

Did she actually incur the fee?
Customer: replied 3 years ago.

yes she did, but the company had her signture on the document for the prepayment penalty she did not have a copy of the doc nor did the reg of deeds in cambridge ma

Expert:  JBaxLaw replied 3 years ago.
Where is the home located? Is this in Texas or Mass.?
Customer: replied 3 years ago.

it was in ma

Expert:  JBaxLaw replied 3 years ago.
The mortgage or deed of trust is recorded. The note or mortgage note is not. The promise to repay is contained in the note including any early repayment penalty. The borrower must sign the note containing the prepayment penalty to be enforceable.

The law in Mass. allows for mortgage prepayment penalty with limits. The law limits the penalty to the balance of the first year’s interest or 3 months’ interest, whichever is less. If the prepayment is within 36 months of taking out the loan in order to refinance, the lender may charge an additional three months interest. That means at most one year and three months interest may be charged. Here is the law:

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