prepayment privilege

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Prepayment Privilege

The right of a borrower to repay a debt in full before it is due. The prepayment privilege is favorable to the borrower because it relieves him/her of the debt, but it deprives the lender of interest that he/she would have received otherwise. However, some lenders offer the prepayment privilege to encourage potential borrowers to borrow from them instead of their competitors.

prepayment privilege

See prepayment clause.

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Recent decisions relating to prepayment clauses, including EFH and Momentive
Robert J. Boller, Partner, Akin Gump Strauss Hauer & Feld LLP to Speak at Knowledge Congress' Live Webcast
Many consumers aren't familiar with prepayment clauses.
Home free: avoiding prepayment penalties on your new house. (Consumer Life)
Though some California banks have included prepayment clauses with rate discounts on adjustable-rate mortgages for several years, virtually no major lenders in the country routinely have marketed them with fixed-rate mortgages.
LENDERS PLAN MORE PREPAYMENT OFFERS
Bank of America, San Francisco, interestingly the pioneer of conventional mortgage-backed securities in 1977, has been a leader in experimenting with prepayment clauses to enhance its portfolio return.
A time for retooling

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