While these new measures don’t standardize penalty calculations, they do require that federally regulated institutions implement the following over the next six to twelve months:
- Show on an annual basis how customers can pay off their mortgages faster without incurring prepayment charges.
- If a penalty applies, advise customers in writing of the applicable prepayment penalty with a description of how the charge was calculated.
- Improve overall borrower awareness by providing enhanced information pertaining to prepayment penalties.
- Provide mortgage penalty calculators on their websites.
- Have a toll-free phone line so customers can talk to knowledgeable staff about mortgage prepayment penalties and find out the actual charge that would apply to them.