61-2d-103 - Prepayment penalty. - Utah Statutes

61-2d-103. Prepayment penalty.
(1) The terms of a high-cost mortgage loan may contain terms under which a borrowermust pay a penalty for prepayment.
(a) However, a penalty for prepayment cannot be assessed more than 36 months after theloan was originally made.
(b) The amount of the penalty may not exceed the total amount of interest paid at 80% ofthe immediately preceding six scheduled payments.
(2) For purposes of this section, any method of computing a refund or unearnedscheduled interest is a prepayment penalty if it is less favorable to the borrower than the actuarialmethod.
(3) Notwithstanding Subsection (1), a high-cost mortgage may not require a prepaymentpenalty if:
(a) the high-cost mortgage is paid with the proceeds of a new loan by the same lender oran affiliate of that lender; or
(b) the penalty is prohibited under other applicable law.
(4) If a prepayment does not pay the full amount owed on the high-cost mortgage whenthe prepayment is made, the penalty shall be reduced by a percentage equal to the percentage ofthe balance owed before the prepayment that remains unpaid.

Enacted by Chapter 252, 2004 General Session