Q: Even though he knew that my home was on the market for sale, my loan officer helped us refinance our house to lower our monthly mortgage payments. He did disclose that there was a prepayment penalty.

Six months after we refinanced, we sold the home and incurred $80,000 prepayment penalty. The prepayment penalty was in the loan documents which were 2 inches thick, but we did not see this language when we signed them.

What was the loan officer’s duty to disclose the prepayment penalty?

A: He did disclose that there was a prepayment penalty. You admit this much in your letter. Your first very costly mistake was not asking how much and when it kicked in.

At the closing, you were required to sign several documents on which the information about the prepayment penalty was disclosed. Your next costly mistake was not reading those documents thoroughly and asking questions about what the disclosures and paperwork meant if you didn’t know the answer to something.

While I feel for your prepayment penalty pain, you made several mistakes in the process and ultimately, you’re probably legally responsible for what you sign.

However, if the loan officer took advantage of you and hid the fact that the prepayment penalty was so high, you may have a case against the loan office. But to know more about this, you should talk to an attorney about your case.

Recently some lenders have gotten into trouble for giving loans to borrowers who clearly did not qualify for the type of loan given to them. While this may not be your case, the methodology used in getting you to take this loan may have been improper.

May 3, 2007.