What are my rights with my private mortage holder?

Question

My private (owner finaced) mortage holder wants to charge me $100.00 late fee on my mortage payment if it is not made on the day it is due, Can he do that? He says he can because him holding the note is just a courtesy between us, almost like I am renting. But yet I pay all the repair bills on the house.

Answer 1

I really, really hope you have a LEGAL note that has been signed in front of an attorney and a notary, because if you don't, you not only don't own the house, but you have been renting it.

Let's assume you have a legal note.

Any late fees assessed by the lienholder MUST under federal and state lending laws, be spelled out exactly how they are calculated. The date of when it's due, and the date of the month when the late fee takes place.  

If your note doesn't have one, then guess what?  He cannot legally charge you a late fee. Then statutory regulations take over and he cannot even consider you late until you are 30-days past due unless the note states otherwise.

$100 may or may not be reasonable, because the legal limit of a late fee on a mortgage is also regulated by law and that is based on a percentage of the loan which varies by state...so I can't answer your question on that.

Answer 2

what does the NOTE say as far as late payment and grace period. What ever is written is the contract