Legal Question in Credit and Debt Law in California

Maximum Interest Allowed by Law on Mortgage Loan That Is Late

We have a mortgage on a mobile home through an individual lender. Last year we fell behind in payments due to loss of job. Now we are trying to get caught up and find that the individual is charging HUGE interest on the past due amounts. The agreement states that he will be able to charge the maximum amount of interest allowed by law. How do we find out what the maximum amount allowed is? Even though we have been sending whatever we could afford, he still states we are 6 months behind because he has applied all the money we sent to this huge interest that he is adding to the loan. Any help or answers you can provide would be greatly appreciated. Thank you in advance for your time in this matter.


Asked on 4/17/04, 9:56 pm

2 Answers from Attorneys
Christopher M. Brainard, Esq. C. M. Brainard & Associates - (310) 266-4115

Re: Maximum Interest Allowed by Law on Mortgage Loan That Is Late

Generally it is 10% per annum from Section 1 of Article XV of the California Constitution. Anything more is probably an illegal penalty. You may contact me.

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Answered on 4/17/04, 11:52 pm
Larry Rothman Larry Rothman & Associates

Re: Maximum Interest Allowed by Law on Mortgage Loan That Is Late

You cannot be charged over 10 %. You may have a case against him. We handle consumer actions throughout California and will have to review your documentation, escrow, and payment schedule. Please call us at 714 363 0220.

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Answered on 4/20/04, 9:47 am


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