Florida Real Estate Exam

Answer A - The prepayment penalty benefits the lender (the beneficiary). Should the borrower (trustor) pay off the note in advance of the due date, the lender would receive an additional amount of cash over and above the balance due on the loan as a penalty charge to the borrower. This clause also benefits the lender in the event that the note is sold; the note is more desirable (more saleable) because of this clause.