Berenato v. Bell Savings & Loan Ass'n

LOUIK, Judge:

This appeal involves the question of whether a mortgagee is entitled to retain a prepayment “penalty” or “premium” when the mortgage is paid off in advance as the result of a sale of the mortgaged property necessitated by the mortgagor’s adverse business circumstances.

The agreement underlying the present case is a mortgage executed on October 17, 1973, between Berenato (mortgagor) and Bell (mortgagee). Included in the terms of the mortgage was a clause allowing Berenato to prepay the mortgage as follows:

“MORTGAGOR may have the privilege of making payment on account of mortgage…