A2-3-06, Prepayment Premiums (11/12/2014)

The servicer must not collect prepayment premiums from the borrower when a mortgage loan is paid in full —unless the mortgage loan was delivered under a negotiated contract that specifically permitted enforcement of the provisions of the mortgage documents that authorized the charging of a premium for prepayments. Even then, the servicer must not charge the prepayment premium when the mortgage debt is accelerated as the result of the borrower’s default in making their mortgage loan payments.

If the servicer collects prepayment premiums under the terms of a negotiated contract, it must report any prepayment premium it collects for a given mortgage loan (even if the premium is not remitted to Fannie Mae) as part of the monthly activity information it provides through Fannie Mae’s investor reporting system.