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prepayment penalties: FHA STILL CHARGING BORROWERS INTEREST ON PAID OFF MORTGAGES! - 11/11/11 03:45 PM
FHA STILL CHARGING BORROWERS INTEREST ON PAID OFF MORTGAGES!
 
During the housing boom in the early years of this century lenders applied innovative solutions when developing loan products. These solutions were designed to eliminate some of the loopholes that borrowers exploited that prevented those lenders from getting a maximum return on their investor’s dollar.  
 
One such innovation is the prepayment penalty.  There is a considerable cost involved for a lender to complete the approval process and fund a loan.  A borrower must make their monthly payments for well over a year before the lender recovers those costs.  If … (1 comments)