Legal Question in Real Estate Law in California

Loan contracts are assignable. There is no need to issue a new contract. In fact it would not be legally permissible to do so. One lender can buy the rights of another under an existing contract, but they cannot issue you a new contract unless you and the new lender mutually agree to a refinance. Otherwise the old contract just goes forward with a new company owning the lender's rights under it.

So the question is whether your original contract with Countrywide had a pre-payment penalty clause or not. If it does, BofA bought the rights to enforce that clause along with the right to collect the payments. If there is no such clause in the contract with Countrywide, then BofA will not legally be able to impose such a charge.

If there is such a clause in the Countrywide loan documents, and you want to dispute it, we would have to go over your entire loan escrow file to see if there were any violations of the RESPA or TILA disclosure requirements. Chances are they dotted their I's and crossed their T's, but it doesn't hurt to look.

It is not at all unusual for the beneficiary and/or the serivcer of a residential loan to change hands, sometimes more than once, and not just through merger of a bankrupt lender into a solvent one, as happened here. Your original loan terms remain intact.

Many low-priced, no-closing-cost loans had early payoff penalties, These generally expire after a few years, so if you pay off a 30-year loan in 12 or 15 years you are unlikely to get dinged for an early payoff fee even if you would have been liable for one in the first few years. Prepayment penalties are regulated by law in California.

Be sure you read not only the promissory note, but the deed of trust as well.

You can read the general statute regulating prepayment charges here: http://law.onecle.com/california/civil/2954.9.html