AN ACT RELATING TO PROPERTY -- MORTGAGES OF REAL PROPERTY

HB 8104 restricts mortgage prepayment penalty rules to loans secured by owner-occupied properties containing one to four dwelling units. Under the new provisions, lenders must allow borrowers to pay off these mortgages without penalty after the first year, while limiting early prepayment fees to two percent of the remaining balance. The bill also permits lenders to offer alternative loan products with different prepayment terms, provided they clearly disclose the costs, obtain borrower consent, and ensure no penalties apply after sixty months. Additionally, lenders offering these alternative products must also make available a standard mortgage option that complies with the stricter prepayment limitations.