Document Updates: Enhanced Prepayment Penalty Addendum, Rider and Disclosure (Cx12387, Cx12388 and Cx12389)

As a result of a routine audit of our prepayment language, the Colorado and Montana versions of Cx12387 Enhanced Prepayment Penalty Addendum, Cx12388 Enhanced Prepayment Penalty Rider and Cx12389 Enhanced Prepayment Penalty Disclosure have been updated. The following changes have been made:

• Montana:
  Previously, Mont. Code Anno., § 32-5-301(9) stated that a prepayment charge could not be collected if the payment was solely the result of the enforcement of a “due on sale” clause in a real estate mortgage or deed of trust that secures the loan, if the loan is prepaid by another loan made by the same licensee or an affiliate of the licensee or if the prepayment occurred as a result of a prepayment made by a credit life insurance policy or other insurance policy. Our documents previously had wording to reflect these requirements, but Mont. Code Anno., § 32-5-301(9) has been repealed. The language that previously fulfilled the requirements of the repealed statute has been removed.

• Colorado:
  On the Colorado version of the documents we removed the words “No prepayment fee shall be charged if the date thereof extends past the adjustment date of any teaser rate, payment
  rate or interest rate included in this mortgage loan.” This line was previously printed to satisfy the requirements of C.R.S. § 12-61-904.5(1), which has been repealed.

These changes are available for testing on Stage & Stage 2 servers and will take effect on August 10, 2024. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

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The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third-party should consult with an attorney prior to embarking upon any specific course of action.