2015 Utah Code
Title 61 - Securities Division - Real Estate Division
Chapter 2d - Utah High Cost Home Loan Act
Section 103 - Prepayment penalty.

61-2d-103. Prepayment penalty.

• (1) The terms of a high-cost mortgage loan may contain terms under which a borrower must pay a penalty for prepayment.
  • (a) However, a penalty for prepayment cannot be assessed more than 36 months after the loan was originally made.
  • (b) The amount of the penalty may not exceed the total amount of interest paid at 80% of the immediately preceding six scheduled payments.

• (2) For purposes of this section, any method of computing a refund or unearned scheduled interest is a prepayment penalty if it is less favorable to the borrower than the actuarial method.

• (3) Notwithstanding Subsection (1), a high-cost mortgage may not require a prepayment penalty if:
  • (a) the high-cost mortgage is paid with the proceeds of a new loan by the same lender or an 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 when the prepayment is made, the penalty shall be reduced by a percentage equal to the percentage of the balance owed before the prepayment that remains unpaid.

Enacted by Chapter 252, 2004 General Session