Section 1103

Prepayment Terms

1103.01

Generally

Requirements

The following table describes various situations and the applicable prepayment provisions; see Part V, Chapter 2: Reporting and Remitting, Section 213: Prepayment Premium Sharing for Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. calculations and sharing between you and Fannie Mae.

Situation

Prepayment Provisions

Borrower attempts to make a voluntary prepayment during the lockout period.

BorrowerBorrowerPerson who is the obligor per the Note. may not make a voluntary prepayment during the lockout period.

ARM Loan is accelerated during the prepayment lockout period.

BorrowerBorrowerPerson who is the obligor per the Note. owes a 5% Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes a voluntary prepayment after the lockout period and before the "open period" (typically 3 months prior to the Maturity Date) for any reason other than a casualty or condemnation.

BorrowerBorrowerPerson who is the obligor per the Note. owes a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

ARM Loan converts to a fixed rate Mortgage Loan.

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes any prepayment during the "open period" (typically 3 months before the Maturity Date).

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes a prepayment at any time due to casualty or condemnation.

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .
1103.02

1% Prepayment Premium Schedule

Requirements

After the 1st Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. , the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. will be 1% for any reason other than a casualty or condemnation.

Loan Year

5-Year Term

7-Year Term

10-Year Term

1 (Locked Out)1

N/A

N/A

N/A

2

1%

1%

1%

3

1%

1%

1%

4

1%

1%

1%

5

1%

1%

1%

62

N/A

1%

1%

7

N/A

1%

1%

8

N/A

N/A

1%

9

N/A

N/A

1%

10

N/A

N/A

1%

1 During the lockout period, the Borrower may not voluntarily prepay the ARM Loan.  If the ARM Loan is accelerated during the lockout period, the Borrower owes a 5% Prepayment Premium.

 

2 If an ARM 5/5 Loan is renewed for the optional 5-year adjustable rate term, the Borrower may not voluntarily prepay during the lockout period at the beginning of the second 5-year adjustable rate term (typically the 6th Loan Year).  If the ARM 5/5 Loan is accelerated during the 6th Loan Year, the Borrower owes a 5% Prepayment Premium.