Should late charges be disclosed with a minimum and maximum amount that can be charged?

Our late charges are currently stated as 5% of the late amount with a min of $10. Every other bank I've worked at, disclosed the late charges with both min & max.

Example: 5% of the late amount with a min of $25 and a max of $250.

Just curious...

either way, I would think...just remember Mobile Home loans have their own rules.

Absolutely, I was just giving an example. Thanks.

It's been a long time since I researched Ga Law on Late Charges, but the reason you see the Maximum in some loans/contracts is because of state law caps. (The last time I looked, it was $100). This is only important when 5% of a payment due is very large. For example, if $10,000 is due and is late, 5% of the amount due is $500. I know of no disclosure law that requires that the note/contract state the Maximum Late Charge, but we need to be careful that the Late Fee imposed does not exceed the state law cap of $100 (if that amount is still correct).

Opinions are ABSOLUTELY mine.

I don't think that is correct, because we have max late charges over $900 and have for years. (not on MH loans, however)

There are additional restrictions under GAFLA (if you are subject to it), I think, and vehicle loans under $5k..so probably it depends on what you are dealing with!

Does anyone have any documentation of a repeal of the late charge restriction on mobilehomes? WK says it was repealed in January 2003.

bump

I haven't heard anything about that.

Okay, then rather than list the FHLB rules, etc...let's break this down...can we? I want to make sure I'm remembering everything right.

Unless it was repealed...MH late charges are 5%/15 days, but do not have a $5.00 cap. This is true regardless of occupancy?

30 day right to cure. I know this applies regardless of occupancy.

Now, the Federal regulation list consumer protections regarding balloon payments, however, where in the heck is the actual restriction? This is the problem, to me, with the DIDMCA. It mentions, but there is little detail...where is the detail at? LOL!

I'm bumping this (I know, it was a long time ago!)to see if anyone has further researched the 15 day or the balloon 'restrictions' on this.

We're still doing the 15 days on MHs because I can't put my hands on anything that clearly says we don't have to anymore. I never have been able to run down the fabled balloon restrictions.

I think you do have to do 15 days...I'm just not sure if that's limited to consumer loans or not. It's the $5 cap that went away.

rephrase: We do the 15 days on all MHs because I can't find anything that says non-consumer is exempt.

We do the 15 days only on consumer and have not had a problem with our compliance auditors, State or FDIC.

That may be because they are pretty clueless on this issue because it is so vaguely written.

I've never seen the State even look at it. I'd be more concerned with a saavy borrower taking issue with it.

I take most all of this back. I've found the balloon payment restrictions, the current LC rules and the Right to Cure and it's all under a CONSUMER rule AND 1st liens only.

If anyone finds anything the don't agree with being restricted to those circumstances, please voice it.

I know links to the MOnetary control Act and 1735f-7a have been previously posted, but here is the one that gives you the real meat of it:

http://law.justia.com/cfr/title12/12-5.0.1.1.53.html#12:5.0.1.1.53.0.83.4