Related to:
Opinion

Opinion Summary of Selected Opinion 99-183

Date: 12/15/1999
Organization: Division of Banks
Docket Number: 99-183

This opinion was issued in the 4th quarter of 1999.

Termination or cancellation fee on home equity lines of credit originated in the Commonwealth

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.

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