A manufactured home HPML secured by both the home and land has an APR 2.5% above APOR. The loan includes a prepayment penalty for the first 36 months. Which statement is correct?
Correct Answer
B) The prepayment penalty is prohibited because this is an HPML
Under TILA Section 1026.35(b)(2), all HPMLs are prohibited from having prepayment penalties, regardless of whether they are secured by manufactured homes, site-built homes, or land. The type of dwelling does not affect this prohibition.
Why This Is the Correct Answer
Under TILA Section 1026.35(b)(2), all HPMLs are prohibited from having prepayment penalties, regardless of whether they are secured by manufactured homes, site-built homes, or land. The type of dwelling does not affect this prohibition.
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