Stiff penalty for early mortgage payoff

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In July 2003, Mitchell Weiss and others borrowed approximately $5.2 million at 5.33 percent interest on a 10-year promissory note from Washington Mutual Bank. The loan was secured by Los Angeles and Beverly Hills buildings. Before signing the loan documents, Weiss read the prepayment penalty and concluded it was about 2 percent of the amount borrowed. He decided that was acceptable and went ahead with signing the paperwork. Purchase Bob Bruss reports online. However, when Weiss paid off the loans in October and November 2004, Washington Mutual charged prepayment penalties and fees of approximately 10 percent of the loan balances. In January 2005, Weiss sued Washington Mutual and its loan officer in state court for fraud, unlawful restraint on alienation of real property, unfair and deceptive business practices, and unjust enrichment. Washington Mutual and the loan officer answered the complaint, explaining Weiss read the loan documents and agreed to them. Furthermore, th...