Termination Or Cancellation Fee On Home Equity Lines Of Credit Originated In The Commonwealth - Q4 1999By the Division of Banks
Consistent with Division Opinion 96-158, a lender may charge a termination or cancellation fee on a home equity line of credit provided that the fee is disclosed as part of the loan contract. Massachusetts General Laws chapter 140, section 114B governs home equity lines of credit in the Commonwealth and it does not prohibit the imposition of a termination or cancellation fee by a lender. Furthermore, any termination fee assessed against a home equity line of credit must be by agreement of the parties and disclosed to the borrower. There is no statutory formula to determine the amount of such fee.