528.4 - PREPAYMENT PENALTY PROHIBITED.
528.4 PREPAYMENT PENALTY PROHIBITED. A financial institution making an alternative mortgage loan may contract with the mortgagor for interest to be paid currently or to accrue, and if accrued, for accrued interest to be added to the mortgage debt on which interest may be charged and collected. Accrued interest which is added to the mortgage debt shall be secured by the mortgage to the same extent as the principal of the alternative mortgage loan. An instrument evidencing an alternative mortgage loan shall not contain a provision imposing a penalty for prepayment of the loan.
Section History: Recent Form 89 Acts, ch 267, §4