what if a lender violates a provision of the prepayment clause?

Question

not offering a choice, not given you awritten notice three before signing or explaning the prepayment clause

Answer 1

As previously said, it is really difficult to prove that a lender violated this.
Are you talking about the loan officer you worked with? That is different.

According to the law, you are to receive written disclosures detailing the terms of your loan application within 3 days after you apply for a mortgage. These include a Good Faith Estimate (which is the costs related to your loan. it is an estimate so there are items on there that are subject to change - what the loan officer/brokerage is receiving should not be one pf those, but sometimes is.)
A Truth in Lending which shows the rate and the cost of loan to you in terms of financing charges over the life of the loan (it also offers your APR which is calculated by adding the costs of originating your loan into the equation - APR is higher than rate, but is not the interest rate you actually pay each month. Note the difference).

You should also receive servicing disclosures, an authorization to pull credit (if you didn't do it before). Details of the proposed loan itself, term of the loan, payment, whether or not escrows are being established.
Prepayment penalty is one item that often is not clearly identified on such docs. But when you sign finals, it is.

There are some things to know about Prepays too - they come in many forms, a percentage of the balance owed, a percentage of interest (ie 6 months interest). And they can range from 0-5 percent in some cases. Check the local laws of your state re PPP's and if you still feel you have been taken advantage of, call your local BBB or the attorney general. You won't get much satisfaction, since it is hard to prove that they did anything wrong, but if there are multiple complaints (especially now) it may be looked at more carefully.
Ameriquest got hammered because of disclosures, so the different states are being more cautious when a consumer complaints about these things, but it takes alot of time.

If you would like to discuss your particular situation and what can be done if anything, please feel free to contact me, I am a certified mortgage planner and am happy to be a resource for answers. [e-mail]

Good luck

Answer 2

I assume you signed the documents of disclosure and all the documents of the mortgage. It is your responsibility to be aware of what contractual requirements are contained in such documents.

Should you decide to pursue this legally, 'black and white documents' always reign supremely over 'he didn't tell me'.

Unless you can PROVE that you were somehow cheated here, you're out of luck on this one.

Answer 3

If you signed the contract without reading it, shame on YOU! It's not up to the lender to explain the contract terms to you. If you don't understand them, YOU need to consult with your attorney and have him or her explain it to you to your satisfaction. (And even if you DO understand what it says, it's never a bad idea to have an attorney review it for any hidden "surprises.")