§ 535.9

535.9 Prepayment penalties on loans secured by real estate mortgages prohibited. 1. As used in this section, 'loan' means a loan of money which is wholly or in part to be used for the purpose of purchasing real property which is a single-family or a two-familydwelling occupied or to be occupied by the borrower, or which is payable over a term of fiveyears or less for the purpose of purchasing agricultural land. 'Loan' includes the refinancingof a contract of sale, and the refinancing of a prior loan, whether or not the borrower alsowas the borrower under the prior loan, and the assumption of a prior loan. 2. Whenever a borrower under a loan prepays part or all of the outstanding balance of the loan the lender shall not receive an amount in payment of interest which is greater thanthe amount determined by applying the rate of interest agreed upon by the lender and theborrower to the unpaid balance of the loan for a period of time during which the borrower hadthe use of the money loaned; and the lender shall not impose any penalty or other charge inaddition to the amount of interest due as a result of the repayment of that loan at a date earlierthan is required by the terms of the

d; and the lender shall not impose any penalty or other charge inaddition to the amount of interest due as a result of the repayment of that loan at a date earlierthan is required by the terms of the loan agreement. A lender may, however, require advancenotice of not more than thirty days of a borrower’s intent to repay the entire outstandingbalance of a loan if the payment of that balance, together with any partial prepayments madepreviously by the borrower, will result in the repayment of the loan at a date earlier than isrequired by the terms of the loan agreement. 3. If any lender receives an amount of interest greater than permitted by subsection 2 of this section, or imposes any penalty or other charge prohibited by subsection 2 of this section,the borrower shall have the right to recover all amounts paid the lender which are in excessof the amounts permitted by subsection 2 of this section, plus attorney’s fees and court costsincurred in any action necessary to effect such recovery. [C79, S79, C81, §535.9]2006 Acts, ch 1075, §1Referred to in §533.315, 535.8, 536A.23 Sat Dec 23 01:37:29 2023 Iowa Code 2024, Section 535.9 (17, 0)