credit-nightmare

BIG PREPAYMENT PENALTY !!!

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WE are selling our home and I just became aware of how big our PPP is. Its 5% of 90% of the loan for 5 YEARS so we will owe around $9,000 !! I don't have exact numbers but we had two papers in the loan one without a PPP and one rider with the PPP , apparently we ( well my dh) signed the PPP form . ( our copies have no signatures)

Is that amount legal in Maryland ? I thought it could only be a certian amount ?

any info would be helpful !!!

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Some info I found on the 'net, not sure what the law is but it appears depending on the lender is chartered would depend on what law would prevail.

http://www.docmagic.com/compliance/prepay/penalties.jsp

Maryland* - In Maryland, a lender may charge any rate of interest provided the loan does not impose a prepayment charge; a lender wishing to impose a prepayment charge may only do so if the interest rate does not exceed 8%. In those circumstances, Maryland permits the imposition of a prepayment charge for prepayments within the first 36 months in an amount not exceeding two (2) months' advance interest on the aggregate amount of all prepayments make within any 12-month period in excess of one-third (1/3) of the amount of the original loan.

http://www.lerchearly.com/pdfs/financialnews_2005JUN.pdf#search='maryland%20mortgage%20prepay%20penalty%20law'

Maryland Law Cannot Prevent National Banks From Imposing Prepayment

Penalties The US District Court for the District of Maryland recently ruled that Maryland state banking laws “are preempted by the federal regulatory regime established pursuant to the National Bank Act.” In National City Bank of Indiana, et. al, v. Charles W. Turnbaugh, the Court ruled in favor of National City, holding that Maryland law prohibiting mortgage prepayment penalties are preempted by the National Bank Act with respect to national banks and their subsidiaries. As a result, Maryland

cannot restrict prepayment penalties imposed by national banks or their subsidiaries.

http://mlis.state.md.us/2006rs/fnotes/bil_0006/hb0216.pdf#search='maryland%20mortgage%20prepay%20penalty%20law'

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