Ferreira v. Yared

As presented by the parties, the appeal raises the question whether private, i.e., noninstitutional, mortgagees are subject to the limitation on prepayment penalties contained in G. L. c. 183, § 56. The borrower had paid the mortgage note in full after the lender had accelerated the note because of earlier payment defaults by the borrower. In such circumstances, we conclude, the payment is not a “prepayment” and the lender may not invoke a prepayment penalty. The statutory question presented, therefore, becomes academic.

From affidavits, interrogatories, and a stipulation offered in connection…