Ohio law stipulates the following in regards to prepayment penalties:
“(1) Except as provided in division (C)(2) of this section, residential mortgage obligations may be prepaid or refinanced without penalty at any time after five years from the execution date of the mortgage. Prior to such time a prepayment or refinancing penalty may be provided not in excess of one percent of the original principal amount of the residential mortgage.
(2)
(a) No penalty may be charged for the prepayment or refinancing of a residential mortgage obligation of less than seventy-five thousand dollars that is made or arranged by a mortgage broker, loan officer, or nonbank mortgage lender, as those terms are defined in section 1345.01 of the Revised Code, and that is secured by a mortgage on a borrower’s real estate that is a first lien on the real estate.
(b) The amount specified in division (C)(2)(a) of this section shall be adjusted annually on the first day of January by the annual percentage change in the consumer price index for all urban consumers, Midwest region, all items, as determined by the bureau of labor statistics of the United States department of labor or, if that index is no longer published, a generally available comparable index, as reported on the first day of June of the year preceding the adjustment. The department of commerce shall publish the adjusted amounts on its official web site.” (Ohio Rev. Code Ann. § 1343.011[C])”
Pursuant to Clause (C)(2) above, the Ohio Division of Financial Institutions recently announced that the loan amount set forth in the exception in Clause (C)(1) will be $88,503 for 2017 (announcement may be downloaded directly from here: http://www.com.state.oh.us/documents/fiin_prepaymentpenalty.pdf).
Due to this change, we are updating the Prepayment Penalty defaults within our system for Ohio to reflect this revised loan amount.
This change is effective immediately. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.
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