What is the name of your state (only U.S. law)? New Mexico
My husband and I entered into a mortgage a couple of years ago on some commercial property which contained a prepayment penalty clause which applied to the first 5 years, within which we would be subject to a 5% penalty along with total interest due on the remaining loan balance, should we pay any portion of the principal or pay off the mortgage. We did not plan to sell this property but are now in a position where we would like to do so and have an interested cash buyer. Due to this clause, however, it appears we can not sell in this manner and still benefit from the sale. I have been told, previously, that a prepayment penalty on residential property is illegal in New Mexico but the mortgage holder is a Delaware LLC and this property is commercial. Is this clause enforceable? Does anyone know anything that would pertain to this situation?
Thanks!
My husband and I entered into a mortgage a couple of years ago on some commercial property which contained a prepayment penalty clause which applied to the first 5 years, within which we would be subject to a 5% penalty along with total interest due on the remaining loan balance, should we pay any portion of the principal or pay off the mortgage. We did not plan to sell this property but are now in a position where we would like to do so and have an interested cash buyer. Due to this clause, however, it appears we can not sell in this manner and still benefit from the sale. I have been told, previously, that a prepayment penalty on residential property is illegal in New Mexico but the mortgage holder is a Delaware LLC and this property is commercial. Is this clause enforceable? Does anyone know anything that would pertain to this situation?
Thanks!