Is it permissible on a non FHA loan to charge interest through the end of the month, regardless of when the payoff is submitted? I know this is the case with FHA but didn't think this was permissible on regular loans. I am dealing with a “too big to fail bank” on a refinance and they are requiring interest through the end of May for a payoff on the 15th.

It depends on the loan contract and the specific laws under which it is governed.

This was a regular FNMA/FHLMC 3200 note. I know there wasn't anything else in the docs because we originated and sold this note a couple of years ago.