Section 56. Any mortgage note secured by a first lien or second or subsequent lien on a dwelling house of 4 or less separate households or on a residential condominium unit occupied or to be occupied in whole or in part by the mortgagor shall be subject to the condition that if said note is paid before the date fixed for payment, any additional amount required to be paid in that event shall be an amount which shall be the balance of the first year's interest or 3 months' interest whichever is less; except, that if anticipatory payment is made within 36 months from the date of the note for the purpose of refinancing such loan in another financial institution, an additional payment not in excess of 3 months' interest may be required; provided, however, that, with respect to the mortgage loan insured by the Federal Housing Commissioner, the mortgagor may be required to reimburse the mortgagee to the full amount of any charges, premiums, or fees required by any statute or by any regulation of the Federal Housing Administration to be paid by the mortgagee upon payment of the note before the date fixed for payment.
No prepayment fee or additional penalty shall be payable by a mortgagor if the mortgage note is paid in full after 36 months from the date of the note. A mortgagor shall not be required to pay a prepayment fee or penalty for making additional payments toward the principal balance for the term of the loan.
Notes of Decisions
Dunham v. Ware Sav. Bank, 423 N.E.2d 998 (Mass. 1981).
“We do determine, however, that equity speaks in favor of enforcing the bank’s rights under its due-on-sale clause when the borrower has the prepayment rights established by G. L. c. 183, § 56. 2. Federal Preemption.”
Ferreira v. Yared, 588 N.E.2d 1370 (Mass. App. Ct. 1992).
· cites it 2× “, noninstitutional, mortgagees are subject to the limitation on prepayment penalties contained in G. L. c. 183, § 56. The borrower had paid the mortgage note in full after the lender had accelerated the note because of earlier payment defaults by the borrower.”
Renda v. Goughberg, 343 N.E.2d 159 (Mass. App. Ct. 1976).
“Because the defendant, as second mortgage holder, was not required by law to permit prepayment (contrast G. L. c. 183, § 56), and because the plaintiffs’ prepayment constituted a voluntary election on their part, cases concerning penalties payable as “liquidated damages” in the…”
Auto. Fin. Corp. v. Ridge Chrysler Plymouth L.L.C., 219 F. Supp. 2d 945 (N.D. Ill. 2002).
“§ 24-10 does not require' the termination of prepayment penalties after 12 months, and Mass. Gen. Laws ch. 183, § 56 merely provides that in the event of prepayment of a mortgage loan on a dwelling house, any prepayment premium is limited to the lesser of (1) the balance of the…”
Ro-Bar Realty, Inc. v. Warren Five Cents Sav. Bank, 1981 Mass. App. Div. 181 (Mass. Dist. Ct., App. Div. 1981).
“The contents of these documents do not appear to have been incorporated in any way into the parties’ ultimate clause; and such integration cannot be inferred from the operation of law, as this was a commercial rather than consumer transaction and the defendant was thus not…”
Bliss v. Intervale Mortg. Corp., 25 Mass. L. Rptr. 216 (Mass. Super. Ct. 2006).
· cites it 10× “In their original verified complaint, tire plaintiffs charged that the prepayment penalties at issue in this case are in excess of limits mandated by G.L.c. 183, §56, 4 and constitute unfair and deceptive practices under G.”
Perkis v. Lipson, 51 Mass. App. Dec. 124 (Mass. Dist. Ct., App. Div. 1973).
“In any event, it does not appear on this record that anticipatory prepayment would be prohibited either by G.L. c. 183, §56 or G.L. c. 140, §90A. The defendants argue that the plaintiff would be unjustly enriched by receiving interest on money which had already been paid back.”
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