Prepayment Penalty of Primary residence loan in NYS

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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?

CAN SOMEONE HELP ME WITH THIS MATTER?

Thaks

-- robert pasquale (charopineda@msn.com), September 01, 2000

Answers

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 (jamonarrez@scif.com), 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. (dsamuel@sfacs.com), December 27, 2001.

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