What is California state law on prepayment penalties?

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California Civil Code Section 2954.9

(a) (1) Except as otherwise provided by statute, where the
original principal obligation is a loan for residential property of
four units or less, the borrower under any note or evidence of
indebtedness secured by a deed of trust or mortgage or any other lien
on real property shall be entitled to prepay the whole or any part
of the balance due, together with accrued interest, at any time.
(2) Nothing in this subdivision shall prevent a borrower from
obligating himself, by an agreement in writing, to pay a prepayment
(3) This subdivision does not apply during any calendar year to a
bona fide loan secured by a deed of trust or mortgage given back
during such calendar year to the seller by the purchaser on account
of the purchase price if the seller does not take back four or more
such deeds of trust or mortgages during such calendar year. Nothing
in this subdivision shall be construed to prohibit a borrower from
making a prepayment by an agreement in writing with the lender.
(b) Except as otherwise provided in Section 10242.6 of the
Business and Professions Code, the principal and accrued interest on
any loan secured by a mortgage or deed of trust on owner-occupied
residential real property containing only four units or less may be
prepaid in whole or in part at any time but only a prepayment made
within five years of the date of execution of such mortgage or deed
of trust may be subject to a prepayment charge and then solely as
herein set forth. An amount not exceeding 20 percent of the original
principal amount may be prepaid in any 12-month period without
penalty. A prepayment charge may be imposed on any amount prepaid in
any 12-month period in excess of 20 percent of the original principal
amount of the loan which charge shall not exceed an amount equal to
the payment of six months' advance interest on the amount prepaid in
excess of 20 percent of the original principal amount.
(c) Notwithstanding subdivisions (a) and (b), there shall be no
prepayment penalty charged to a borrower under a loan subject to this
section if the residential structure securing the loan has been
damaged to such an extent by a natural disaster for which a state of
emergency is declared by the Governor, pursuant to Chapter 7
(commencing with Section 8550) of Division 1 of Title 2 of the
Government Code, that the residential structure cannot be occupied
and the prepayment is causally related thereto.
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Is a prepayment penalty on a home loan tax deductible?

Answer . No the penalty is not deductible on a home loan. Only the interest that is paid. The penalty is considered as a late payment not interest. good luck.. The initial answer to this question is incorrect. Prepayment penalties are sometimes deductible if the payment is made out of pocket as ( Full Answer )

How can you get out of a home loan prepayment penalty?

Answer . If this prepayment penalty is written into the contract, no way can you get out of it. Usually, though, the prepayment penalties last about 3 years. At the end of the 3 years, the prepayment penalty will be gone. Also, some companies will forgive the prepayment penalty, if you get your n ( Full Answer )

If a loan has a prepayment penalty should you still pay it off?

Answer . It depends upon whether or not you want to pay the prepayment penalty.. Answer . You would need to consider the amount of interest that would be charged versus the amount of penalty incurred for paying the loan off early, before making a decision.

Will a lender amend a mortgage agreement from a 15 year to a 30 year and waive the prepayment penalty?

\n. \n Answer \n. \nTypically no. They will most likely be able to find a way to re-write the mortgage from a 15-yr to a 30-yr but it is unlikely that they will waive the prepayment penalty. Also, depending on how far into your 15-yr mortgage you are, they may NOT be able to refinance you d ( Full Answer )

Can you take out a home equity loan if you have a prepayment penalty if you sell your home before two years after you purchase it?

Answer . Yes, as long as there is equity to use. The lender that will do the home equity loan will have figured the prepayment penalty into the 1st mortgage balance just in case you do sell your home before 2 yrs. are up. \n. \nThe lender will ask for specific paperwork including your mortgage ( Full Answer )

What is the penalty for attempted murder in the state of California?

Answer . The penalty is life in prison depending on the circumstances and court decision, there is no single penalty, the court decides. Premeditated attempted murder could be 10 years on a 25 year sentence (good time + parole) or could be death if it was a child or minor or the like. Self defens ( Full Answer )

What is the penalty for solicitation in California?

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What is the penalty for vehicular manslaughter in california?

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What are the Pregnancy laws in the state of California?

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What are the penalties for committing adultery in California?

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What are the penalties for bigamy in California?

If a married person marries an unmarried person the penalty is one year prison term or a $10,000 fine. If an unmarried person knowingly marries another person's husband or wife, then the penalty is $5,000 or one year prison term.

Is it against the law to purchase alcohol in California with an out of state license?

No, it is not against the law to purchase (or sell) alcohol with an out of state license in California. However, military IDs and Passports are not acceptable forms of ID. ABC requires a physical description of the patron, in addition to the picture, which neither a military ID nor a US Passport pos ( Full Answer )

What are prepayments?

Prepayments are payments that are done for goods and services which a company/organization expect to receive or consume in future periods. Known again as prior payments the amounts payed in advance can be for rent, software license etc. Prepayments goods and services are recognized as assets once ( Full Answer )

Penalties for murder in California?

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What is the penalty for horse theft in California?

Covered in California Penal Code 487A, Grand Carcass Theft. Itcan be a misdemeanor or a felony, depending on the worth of thehorse. The penalty CAN be as high as 3 years in prison and a fineof up to $10,000.

What are the laws of underage dating with and adult in the state of California?

In 49 states, adults (18 years of age and older) cannot legally take part in sexual conduct with minors (17 years of age and under). This is not limited to sexual intercourse, and any police officer who believes this is wrong will try their hardest to find some kind of illegal activity to arrest you ( Full Answer )

What is the penalty for expired license in California?

The penalties for an expired license depend on the citation youreceived. An appearance in court is required. The penalties couldbe a maximum $1000 fine, 6 months in jail, or 3 years probation.Failure to appear in court will result in a warrant for yourarrest.

Where would you find relevant California and federal state laws?

To find relevant California laws I would have to look at the most recently updated state constitution since laws vary by state. To find federal laws, I would seek out the U.S. Constitution since it is "the supreme law of the land". The U.S. Constitution cannot be challenged and if a state law violat ( Full Answer )

How did California abolish the death penalty?

In 1972 the Supreme Court abolished the death penalty on the grounds that is was unconstitutional and was cruel and unusual punishment. I admit the gas chamber would not be a pleasant way to die, but it's nothing compared to what Sharon Tate and her friends had to endure in the last moments of their ( Full Answer )

What is the penalty for stalking in California State?

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What is the penalty for kidnapping in California State?

In California, if you are convicted of kidnapping, you may face the following penalties: . 3-8 years in State Prison if the victim is over 14 . 11 years in State Prison if victim is under 14 . Heavy fines . Victim restitution . Mandatory counseling . Long-term probation . Lifetime driver's li ( Full Answer )

Is it a California state law or a us law to go to school?

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What does a prepayment penalty that is Not Applicable mean?

If you have prepayment penalty clause in your agreement with lender, then if you pay off the entire loan amount with in the maturity period of your loan. You have to pay some amount of money as penalty. If prepayment penalty is not applicable means, even though if you pay off the the loan amount wi ( Full Answer )

What are the foreclosure laws in the state of California?

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What is the maximum prepayment penalty on commercial mortgages?

There is no single maximum unless you want to research every jurisdiction to find the jurisdiction with the highest allowance. Prepayment penalties vary from state to state, and federal banks follow federal law. Case law has freed them from state consumer protection laws.