Title 61 Securities Division - Real Estate Division Chapter 2d Utah High Cost Home Loan Act Section 103 Prepayment penalty.
61-2d-103.Prepayment penalty.
(1) The terms of a high-cost mortgage loan may contain terms under which a borrower
must pay a penalty for prepayment.
(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loan was originally made.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
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