Homeowner Refinancing: Excessive Prepayment Penalty Fees

Many mortgage companies require borrowers to pay a "prepayment penalty" when paying off a loan or refinancing. These fees often range from $500 to $5000, but can be as high as $10,000.00. Whether a mortgage company can charge a "prepayment penalty" and if so, how large a fee they demand, is governed by the terms of the borrower’s mortgage documents and state law. Recently, Zimmerman Reed has investigated certain mortgage companies’ practices imposing these penalty fees and discovered that excessive prepayment penalties have been charged, resulting in thousands of dollars in overcharges to borrowers. Because of the subtle way these penalties are charged and collected, many borrowers may not know that they were overcharged and in a position to claim a refund.

Zimmerman Reed P.L.L.P. currently represents homeowners in a lawsuit challenging the practices of Washington Mutual, Inc. and its subsidiary, Long Beach Mortgage Co., charging excessive prepayment penalties to borrowers.

It is possible that other mortgage companies have charged their borrowers excessive prepayment penalties in a similar manner. If you recently paid off a mortgage loan by moving or refinancing, you may have been charged an excessive prepayment penalty. If so, you may be able to claim a refund. If you would like one of our lawyers to investigate your possible claim for a refund, please contact attorney J. Gordon Rudd, Jr. at 1-800-755-0098 or attorney Hart Robinovitch at 1-800-493-2827 or click here to fill out a response form.