Finance
In South Dakota, a 'prepayment penalty' in a mortgage loan:
AIs required by federal law for all mortgages
BCharges the borrower a fee for paying off the loan before its term ends✓ Correct
CPenalizes the lender for pre-approving loans
DOnly applies to commercial mortgages
Explanation
A prepayment penalty charges borrowers a fee if they pay off the loan early (through sale, refinance, or extra payments). QM rules limit prepayment penalties on most consumer mortgages.
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