Pre-Payment Penalty

[RedTape]

We refinanced our home in Kansas City, MO in July of 1998 through a prime Rica agent. Although there was a pre-payment penalty on our closing documents, our agent assured us that, it would be waived if we sold our home. They only enforce the penalty if we refinanced, so we thought. We sold our home; the mortgage company advised us that the pre-payment penalty would be enforced and that they changed their policy to enforce the penalty in the beginning of 1998. They agreed to reimburse half as a "courtesy." I contacted the agent who advised that was the way he was trained and that he would sign an affidavit stating such. I had to take money out of my 401K to pay for the pre-payment penalty. Do I have recourse to have my penalty reimbursed, but also the penalty and fees I incurred due to taking funds out of my 401K?

 

[msattorney]

Unfortunately, the contract had a prepayment penalty and all you have is the word of the person who said it woud not be enforced. If this ever happens again, get it in writing or have them strike out the phrse in the document. Was it the policy of the company not to enforce it? Do you know of specific cases of it not being enforced? You could try talking to the officers of the mortgage company about your situation. They might be able to come up with a compromise for you. It is worth a try.