(4) where there is any action or inaction by the obligor that adversely affects the lender's security for the loan or any rights of the lender in such security.
(c) No negative amortization.--Except for loans to obligors with gross income in excess of 150% of median family income, no covered loan may contract for a payment schedule with regular periodic payments that cause the principal balance to increase. This subsection shall not prohibit negative amortization as a consequence of a temporary forbearance or restructure consented to by the obligor.
(d) No increased interest rate upon default.--No covered loan may contract for any increase in the interest rate as a result of a default. This provision shall not apply to periodic interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan agreement provided the change in the interest rate is not occasioned by the event of default or permissible acceleration of the indebtedness.
(e) No advance payments.--No covered loan may include terms under which any periodic payments required under the loan are paid in advance from the loan proceeds.
(f) Limitations on prepayment fees.--The following limitation on prepayment fees shall be observed:(1) A prepayment fee or penalty shall be permitted only during the first 60 months after the date of execution of a covered loan.
(2) A lender shall not include a prepayment fee in a covered loan unless it also makes available a loan product without a prepayment fee.
(3) No prepayment fee or penalty may be charged on a refinancing of a covered loan with a covered loan if the covered loan being refinanced is owned by the refinancing lender at the time of such refinancing.
1989, Dec. 22, P.L. 687, No. 90, § 511, added 2001, June 25, P.L. 621, No. 55, § 8, effective in 1 year.
63 P.S. § 456.511, PA ST 63 P.S. § 456.511Current through Act 40 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
| End of Document |