Mortgage Servicing and Loan Modifications: 4.8.3.5 Prepayment Fees and Loan Acceleration
If the exercise of the due-on-sale clause cannot be prevented, at a minimum, a transferee should not be obligated to pay any prepayment fee set forth in the contract. Some mortgages require a borrower to pay a penalty if the loan is repaid before it is legally due.613 When the prepayment is not voluntary, as when the lender enforces a due-on-sale clause, imposing a prepayment penalty is unfair.