I have a prepayment penalty on my loan for 5 years. I was recently informed that if i decide to sell the house within the 5 years there is a federal law that prevents the lenders from charging a prepayment penalty in this case. Is this true?

Another law question....

Too many variables here..... There are state and federal laws that cover this and what rules one lender might not necessarily rule the one down the street depending on whether or not their charter is a State charter or a Federal one. You need to consult with an attorney, but chances are that if it is in the documents is enforceable.