Prepayment Penalty of Primary residence loan in NYS : LUSENET : Fair Lending : One Thread

I live in New York State and I took out a First mortuge for my primary residence in February 1999. I sold the house yesterday and I found out that their was a prepayment penalty of 90 days interest on the loan. I was under the impression that the penalty only applied if I paid back the loan within the fist year. The company "Equi-Credit" out of Jacksonville,Fl said the penalty was for the fist three years of the loan. WHAT IS THE LAW GUIDES LINE FOR NEW YORK SATE REGUARDING THIS MATTER?



-- robert pasquale (, September 01, 2000


Hi. I wish I could help you, but I'm going through a similar situation. My mom is recently totally disabled and I am trying to re- finance the loan into my name and they have me right under their thumb. They know my situation and are taking advantage of it. My lender is Beneficial. We have a 5 year pre-payment penalty. Apparently there are no stipulations. I am doing some research as well, if you come across something that helps you, if you wouldn't mind sharing it I would appreciate it very much and I will do the same. Thank you!

-- Joyce Monarrez (, December 05, 2001.

According to New York State law, lenders may charge prepayment penalties on mortgage loans secured by one to six family owner- occupied residential property. However, lenders can only charge a penalty only during the first year of the loan if the interest rate charged on the loan is greater than 6%(six percent). (For more information, see N.Y. Gen. Oblig. Law Section 5-501.) Therefore, if your mortgage loan carries an interest rate greater than 6%, the prepayment penalty can only be charged if you pay off the loan within one year from the date of origination.

-- Denise L. Samuel, Esq. (, December 27, 2001.

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