How much can a bank charge for late fees on a mortgage loan?
I made a mortgage loan payment after the due date which the bank charged me a $50.00 late fee. That is cool. I expected it. They claimed I skipped a payment because I went past 30 days between payments. They wanted a double payment at which I couldn’t swing. The late fee rose up to $150.00 a month and now is up to $254.00 a month. My payment is $500.00 a month. I paid them $1000.00 in July to bring my payment up to date and to meet my monthly mortgage payment requirement for July. However, I did not pay the late fee in full. Many banks will tack on the fees to the end of the balance. My bank is not and is charging me $254.00 late fee on top of a late fee. Is this legal? Are there limits to what they can charge? One late fee has grown to $550.00 for the month which is more than my regular mortgage loan payment. This makes it impossible to catch up. I tried to work with my bank, but the right hand does not know what the left is doing. Any suggestions? This is maddening! Help!
September 28th, 2010 at 9:04 pm
OK this is a complicated situation. I think that you need to go into the bank that holds your mortgage and get someone to sit down with you and figure this out. Do not leave until this is sorted out in a way that lets you catch up on all these late fees. I have no idea if this is legal or not, but that really doesn’t matter at this point. Unless you want to take them to court, go in and get someone to figure this out with you. Usually it is easier to do this in person than over the phone. Call ahead to the bank and find out exactly who you need to speak with to get this fixed.
September 28th, 2010 at 9:13 pm
It is hard to give you an exact answer here. But as to the legality of it. Mortgage companies have the loan documents looked over by dozens of lawyers, looking at every different way to see if there is even a small possibility that they are doing something wrong. So the chances that they are doing something wrong or illegal is extremely slim.
Now somewhere in the loan documents there should be a section on Late Fees. This will give you the breakdown of how things are charged. If what you are being charged is not what is in writing then you have a valid complaint. But even this will take several calls to get it straighted out.
You need to contact the company that holds the mortgage. If they are local then go into the local branch. If they are not local call the Customer Service Rep, but ask to speak to a Supervisor. Generally the CSR’s who answer the phone have little power to do anything more than just take payments and give you information. But a supervisor can at least possibly do something or get you to the department that you need to talk to.
September 28th, 2010 at 10:12 pm
You should seek advise from attorney , if you cannot afford one check with Legal Aid in your state.