Legal Question in Investment Law in California

I own some notes and the servicer of the notes has a percentage fee taken out each month. The notes and the prospectus only states that the servicer charges a 1% fee for servicing the notes. After a couple of months I noticed that the servicer was taking out 2% fee each month. When I inquired with the servicer, they stated that they upload most of their fees up front in the first 11 months. They stated that over a three year period, their fee would average 1%. I found no notice anywhere stating that they would be charging fees using some method of declining amortization. Their website states that they charge their fee in the same way that interest is charged, but interest is charged as straight interest. Is this legal?

Asked on 4/07/11, 11:06 am

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0 attorneys agreed

It doesn't sound like they are abiding by their contract with you, but I would have to review the documentation to give any reliable opinion.

Answered on 4/07/11, 11:10 am

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