Finance
What is a pre-payment penalty in a Nevada mortgage and how has federal law restricted it?
AA reward for paying off a mortgage early
BA fee charged by the lender if the borrower pays off the loan early; Dodd-Frank significantly restricts prepayment penalties on qualified mortgages✓ Correct
CA fee charged by escrow for early closing
DA penalty assessed by the Nevada Real Estate Division for early property sales
Explanation
A prepayment penalty is a fee charged if the borrower pays off the mortgage early. The Dodd-Frank Act restricts or eliminates prepayment penalties on most residential mortgages (Qualified Mortgages).
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