Are “construtive late fees” on a mortgage legal when not agreed upon?

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Are “construtive late fees” on a mortgage legal when not agreed upon?

I have a mortgage from a bank that is serviced by another bank. Both are major banks. In my mortgage paperwork it says specifically that if I am 15 days late I will owe a certain percentage. However, this month there computer system was locked so I was unable to make an online payment 48 hours in advanced and they didnt fix it on time, so when I did make payment it was 24 hours late.In their computer system it charges $3.50 for a “fee/late fee” (exactly how it’s worded) when you pay after noon on the day its due, online. I believe this is a constructive late fee under a different name.

Asked on May 7, 2012 under Real Estate Law, Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If your loan allows for the assessment of a late fee if your monthly payment is late, then the late fee charged is legal. However, in your matter where you have been paying online and for some reason the lender's online system was down making you unable to pay the loan payment on time, you should not be assessed the late payment.

You tried but the lender's system did not allow you to make it through no fault of your own. You should not have to pay the late fee.


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