Loan Auditors

Two states that have laws against prepayment penalties are Texas and Vermont. These are good laws considering that many homeowners who default on their loans do so as a result running into financial trouble and losing their home because they could not pay off their loan early when they had the chance. Prepayment penalties discourage homeowners from making sound financial decisions that can affect their future and long-term financial security.

The biggest problem with prepayment penalties are that many of them are nondisclosed. That is, the mortgage company doesn’t tell the borrower about the penalty during the document preparation process. As a result, many homeowners find themselves paying huge penalties when they sell their homes and that may cause them financial hardship to such a degree that they can’t afford another home.

If you find yourself trying to sell your home and have been notified of a prepayment penalty, request a forensic loan audit. If the mortgage company has violated any federal law it may be in their best interest to waive your prepayment penalty or modify your loan to lessen or do away with it altogether.