Legal Question in Business Law in New York

Re: Home Loans

California Business and Professions Code section 10242(c) says "No interest may be charged with respect to any period prior to the date that the proceeds of the loan are made available to the borrower or are deposited in escrow." However, the chapter regulates loans made or arranged by real estate licensees, and may not apply in your case. Further, the payment sought may be a prepayment of future interest rather than an impermissible interest charge for the pre-funding period.

Essentially, you need to read the fine print of your loan agreement to see whether the payment is consistent with the terms of the loan. If is is, you have an uphill battle to prove that the loan agreement is inconsistent with law or public policy. If it isn't, you only have to convince the bank that it has misinterpreted it's own contract.

Either way, is the amount involved worth a serious challenge?

Re: Home Loans

This depends upon what was signed at the

loan closing. It is not typical, but I

have closed transactions where there is a

minor interest credit to the borrower to

arrange for a full payment to start earlier

than one month. This is due to the use

of the money. This is clearly a contract

matter, and a full review of all contract

documents would be needed

Call 1-716-235-2560 to make further arrangement

if desired