10 Pa. Code § 7.8 - Prepayment penalty prohibited
(a)
Residential mortgage obligations contracted for on or after January 30, 1974
may be prepaid in full without a penalty or other charge before the maturity of
the loan obligation.
(b) A
residential mortgage lender is entitled to receive a finance charge which
includes interest and other charges permissible under the act, up to and
including the date of receipt of prepayment from the residential mortgage
debtor but not beyond the date of the receipt.
(c) Examples of this section are as follows:
(1) If a mortgage obligation requiring
payment on the tenth day of each month is prepaid in full by the residential
mortgage debtor and received by the residential mortgage lender on the fifth
day of the month, the residential mortgage lender is entitled to the finance
charge to the fifth day of the month, when the prepayment was
received.
(2) If a residential
mortgage obligation requiring payment on the first day of each month is prepaid
in full by the residential mortgage debtor to the residential mortgage lender
on the fourth day of the month, the residential mortgage lender is entitled to
the finance charge to the fourth day of the month, when the prepayment was
received.
(3) If a residential
mortgage obligation requiring payment on the first of each month is prepaid in
full and mailed on or before the first of the month by the residential mortgage
debtor to the residential mortgage lender who does not receive such prepayment
until the fourth day of the month, the residential mortgage lender is entitled
to the finance charge to the fourth day of the month, when the prepayment was
received.
(d) Immediately
upon receipt of a prepayment, the residential mortgage lender shall stamp or
otherwise duly record the date of receipt in its records. Prepayments made by a
residential mortgage debtor after office or banking hours or on a nonbanking
day on which a residential mortgage lender may provide certain limited services
for the convenience of the public or its customers but is not otherwise open
for business shall be processed by the residential mortgage lender on the next
full business or banking day.
(e) A
residential mortgage lender may collect any charge otherwise permitted by the
act, this chapter or other law to the extent not inconsistent with section 405
of the act (41 P. S. §
405) and of
this section.
Notes
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