The bill amends Section 34-23-5 of the General Laws in Chapter 34-23, which pertains to mortgages of real property in Rhode Island. It introduces new provisions regarding the prepayment of mortgage loans, specifically stating that the limitations on prepayment penalties apply only to mortgage loans made for real estate containing owner-occupied dwelling houses of not more than four (4) dwelling units.

The bill requires that the terms, conditions, and amount of any prepayment penalty or similar charges be prominently and conspicuously disclosed in writing to the borrower, and that the borrower must agree and consent to be bound by these terms and conditions. Additionally, it prohibits the imposition of any prepayment penalty for prepayments occurring more than sixty (60) months after the date of the loan.

This act is designed to ensure transparency in mortgage agreements and will take effect upon passage.

Statutes affected:
8104: 34-23-5
8104  SUB A: 34-23-5