| (1) |
The terms of a high-cost mortgage loan may contain terms under which a borrower must pay a penalty for prepayment.
Terms Used In Utah Code 61-2d-103- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
| (a) |
However, a penalty for prepayment cannot be assessed more than 36 months after the loan was originally made. |
| (b) |
The amount of the penalty may not exceed the total amount of interest paid at 80% of the immediately preceding six scheduled payments. |
|
| (2) |
For purposes of this section, any method of computing a refund or unearned scheduled interest is a prepayment penalty if it is less favorable to the borrower than the actuarial method. |
| (3) |
Notwithstanding Subsection (1), a high-cost mortgage may not require a prepayment penalty if:
| (a) |
the high-cost mortgage is paid with the proceeds of a new loan by the same lender or an affiliate of that lender; or |
| (b) |
the penalty is prohibited under other applicable law. |
|
| (4) |
If a prepayment does not pay the full amount owed on the high-cost mortgage when the prepayment is made, the penalty shall be reduced by a percentage equal to the percentage of the balance owed before the prepayment that remains unpaid. |
Enacted by Chapter 252, 2004 General Session
