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58.137 INTEREST, POINTS, FINANCE CHARGES, FEES, AND OTHER CHARGES.
    Subdivision 1. Financed interest, points, finance charges, fees, and other charges. A
residential mortgage originator making or modifying a residential mortgage loan to a borrower
located in this state must not include in the principal amount of any residential mortgage loan
all or any portion of any lender fee in an aggregate amount exceeding five percent of the loan
amount. This subdivision shall not apply to residential mortgage loans which are insured or
guaranteed by the secretary of housing and urban development or the administrator of veterans
affairs or the administrator of the Farmers Home Administration or any successor.
    "Lender fee" means interest, points, finance charges, fees, and other charges payable in
connection with the residential mortgage loan: (1) by the borrower to any residential mortgage
originator or to any assignee of any residential mortgage originator; or (2) by the lender to
a mortgage broker. Lender fee does not include recording fees, mortgage registration taxes,
passthroughs, or other amounts that are paid by any person to any government entity, filing office,
or other third party that is not a residential mortgage originator or an assignee of a residential
mortgage originator. Lender fee also does not include any amount that is set aside to pay taxes or
insurance on any property securing the residential mortgage loan.
    "Loan amount" means: (1) for a line of credit, the maximum principal amount of the line of
credit; and (2) for any other residential mortgage loan, the principal amount of the residential
mortgage loan excluding all interest, points, finance charges, fees, and other charges. A residential
mortgage originator shall not charge, receive, or collect any excess financed interest, points,
finance charges, fees, or other charges described in this subdivision, or any interest, points, finance
charges, fees, or other charges with respect to this excess.
    Subd. 2. Prepayment penalties. (a) A residential mortgage originator making a residential
mortgage loan that is a prime loan to a borrower located in this state shall not charge, receive, or
collect any prepayment penalty, fee, premium, or other charge:
    (1) for any partial prepayment of the residential mortgage loan; or
    (2) for any prepayment of the residential mortgage loan upon the sale of any residential real
property, or the sale of any stock, interest, or lease relating to cooperative ownership of residential
real property, securing the loan; or
    (3) for any prepayment of the residential mortgage loan if the prepayment is made more than
42 months after the date of the note or other agreement for the residential mortgage loan; or
    (4) for any prepayment of the residential mortgage loan if the aggregate amount of all
prepayment penalties, fees, premiums, and other charges exceeds the lesser of (i) an amount
equal to two percent of the unpaid principal balance of the residential mortgage loan at the time
of prepayment, or (ii) an amount equal to 60 days' interest, at the interest rate in effect on the
residential mortgage loan at the time of prepayment, on the unpaid principal balance of the
residential mortgage loan at the time of prepayment.
    (b) If a residential mortgage originator offers or makes residential mortgage loans to any
borrowers located in this state with prepayment penalties, fees, premiums, or other charges
exceeding the maximum amount under paragraph (a), clause (4), then the residential mortgage
originator shall provide the following disclosure to each prospective borrower located in this state
that requests a residential mortgage loan from the residential mortgage originator, whether or not
the prospective borrower receives a residential mortgage loan:
THIS IS VERY IMPORTANT
THIS LENDER CHARGES YOU A SUBSTANTIAL PENALTY IF YOU PAY OFF OR
REFINANCE YOUR LOAN BEFORE MATURITY. ASK THE LENDER HOW MUCH THE
PENALTY WILL BE FOR YOUR LOAN.
    The residential mortgage originator shall read the disclosure to the prospective borrower
when the prospective borrower requests a residential mortgage loan, and again within three days
before the borrower signs the note or other agreement for the residential mortgage loan. The
residential mortgage originator also shall provide the disclosure to the prospective borrower in
writing so that it is received by the prospective borrower within five days after the residential
mortgage originator receives the prospective borrower's request for a residential mortgage loan,
and again within three days before the prospective borrower signs the note or other agreement for
the residential mortgage loan. The written disclosure must be stated in at least 16-point capitalized
boldface type on a single sheet of paper that contains only the disclosure, the date on which the
disclosure form is sent or provided, the name, address, and telephone number of the residential
mortgage originator, the name and address of the prospective borrower, and, at the option of the
residential mortgage originator, the prospective borrower's dated and signed acknowledgment of
receipt of the disclosure form. The provisions of the disclosure form, other than the disclosure
in this subdivision, are not required to be in at least 16-point capitalized boldface type. The
prospective borrower shall be permitted to keep a copy of each written disclosure form. When a
prospective borrower asks a residential mortgage originator for information about a prepayment
penalty, the residential mortgage originator shall give the prospective borrower the requested
information, and shall tell the borrower the highest aggregate amount of the prepayment penalties,
fees, premiums, and other charges that the residential mortgage originator would charge to the
prospective borrower for prepayment of the residential mortgage loan one year after it is funded,
based on a hypothetical unpaid principal balance of $100,000 and also based on the highest
interest rate that the residential mortgage originator would charge to the prospective borrower. A
mortgage originator responding to requests for residential mortgage loans via the Internet may
make the disclosure in a manner acceptable to the commissioner.
    (c) A residential mortgage originator shall not enter into a subprime loan that contains a
provision requiring or permitting the imposition of a penalty, fee, premium, or other charge in
the event the residential mortgage loan is prepaid in whole or in part. This prohibition does not
apply to any loan with a principal amount that, or, in the case of an open-end credit plan, in
which the borrower's initial maximum credit limit, exceeds the conforming loan size limit for a
single-family dwelling as established from time to time by Fannie Mae.
    Subd. 3. Application. This section applies to residential mortgage originators located in this
state and residential mortgage originators located outside this state.
History: 2002 c 342 s 8; 2007 c 18 s 3; 2007 c 74 s 4