Based on a recent amendment to Arkansas Code § 23-39-513(8)(B), concerning prepayment penalties (See HB 1981), which became effective on March 31, 2011, DocMagic’s Arkansas soft and hard prepayment penalty addenda and riders have been updated to omit the provision that states that the prepayment penalty is the greater of tiered prepayment penalties over a three-year period or “an amount equal to interest for six (6) months calculated on eighty percent (80%) of the remaining principal balance due on the mortgage loan as of the date the Prepayment is made.” 

Accordingly, the updated provision of the Arkansas prepayment penalty addenda and riders now reads like so:

If within THIRTY-SIX (36) months following the date the loan was made I make a Prepayment, I will pay a Prepayment charge in an amount not to exceed any of the following amounts;

THREE percent (3.000%) of the Principal loan amount remaining on the date of Prepayment if the Prepayment is made within the first twelve-month period immediately following the date the loan was made;                                                            

TWO percent (2.000%) of the Principal loan amount remaining on the date of Prepayment, if the Prepayment is made within the second twelve-month period immediately following the date the loan was made;

ONE percent (1.000%) of the Principal loan amount remaining on the date of Prepayment, if Prepayment is made within the third  twelve-month period immediately following the date the loan was made.

The Prepayment Penalty Matrix has been updated to reflect the above change to the Arkansas prepayment penalty addenda (DocMagic file names ARPATNS.PPF and ARPATN.PPF) and riders (DocMagic file names ARPRS.PPF and ARPR.PPF).

Please contact DocMagic, Inc.’s Customer Service Department should you have any questions concerning the Arkansas prepayment penalty addenda and riders.