Protecting the Rights of Consumers
For Over 25 Years
Edelman Combs Latturner & Goodwin, LLC
If you obtained an FHA mortgage loan on or after March 14, 2016 (the date that the FHA case number was issued controls), the contractual late charges are less than on FHA loans obtained prior to March 14, 2016. Under a new HUD policy, post-March 14, 2016 loans only permit the lender or servicer to assess late charges not to exceed 4% of the overdue payment of Principal and Interest (P&I). Previously, lenders and servicers were able to assess late charges based on overdue payments to Principal and Interest & Taxes & Insurance (PITI). The elimination of taxes & Insurance from the late charge calculation significantly reduces the permissible amount of late charges.
In addition, the borrower must be provided with an advance written notice of the due date of the payment, the amount of the regular payment, the date on which the late charge will be imposed and the amount of the late charge (or the full amount now due which consists of the regular monthly payment plus the late charge amount).
If you obtained an FHA loan on or after March 14, 2016 and made a late payment, or are in foreclosure, check the amount of your late charges, and whether you received the required notice, or contact us to do so.