This is not legal advice for your situation*

Prepayment Fees

To better serve our customers, we've created a DocMagic Prepayment Matrix that lists our verbiage for hard, soft and state-specific prepayment addenda and riders. This matrix provides loan types and limitations for when particular verbiage appears. Also, the DocMagic form names and citations are listed.

Here is the matrix: Prepayment Penalty Matrix.

Sample Multi-state Forms:

1. Multistate Prepayment Addendum - Hard

2. Multistate Prepayment Rider - Hard

3. Multistate Prepayment Addendum - Soft

4. Multistate Prepayment Rider - Soft

Please note these are our DocMagic defaults, but your INVESTOR SPECIFIC REQUIREMENTS MAY BE DIFFERENT. Please refer to investor guidelines for a particular investor's requirements.

Effective July 1, 2003, state-chartered housing creditors will no longer be able to rely upon the Alternative Mortgage Transactions Parity Act (the "Parity Act") to originate "alternative mortgage transactions" in contravention of state-based restrictions on prepayment penalties. Accordingly, state-chartered housing creditors wishing to impose prepayment charges on alternative mortgage transactions made on or after July 1, 2003 must conform to the requirements of applicable state law. To better assist DocMagic customers to cope with this change, we have painstakingly researched the laws applicable to the assessment and collection of prepayment charges in all jurisdictions.

  • For a detailed, scholarly analysis of the history of prepayment penalties under the Parity Act, the OTS's rationale and justification for its treatment of prepayment penalties (including the role of predatory lending in that treatment), and an analysis of selected state-specific legislation applicable to predatory lending and alternative mortgage transactions, visit State-based Prepayment Penalty Requirements and the DocMagic Solution.

  • For a detailed, practical explanation of DocMagic's response to this change in the law, including links to specific prepayment penalty provisions, visit OTS Says: Parity Act No Longer Preempts Prepayment Penalties.

If you have any questions regarding any of the information relating to prepayment penalties, please contact DocMagic's Compliance Department at (800) 649-1362.




*This article is distributed to provide general information about the subject matter covered and should not be utilized as a substitute for professional advice in specific situations. If you require such advice, please consult with your own professional advisers.


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