DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1484257
65 interest charged on the entire loan balance following a monthly payment default. e court distinguished contrary case law supporting the validity of default interest charged on the entire loan balance following the maturity of the loan. As a result, charging default interest on the remaining loan balance following the maturity of the loan should be unaffected by this decision. Likewise, this decision arguably does not affect a lender's right to charge default interest on amounts in default. Questions also remain about whether a lender can charge default interest on an amount less than the entire unpaid balance. Of course, any default interest charge must still be reasonably related to the potential loss caused by the default. Going forward, we recommend that lenders consult with an attorney before charging any default interest. In addition, lenders should have their loan documents reviewed to maximize the ability to charge default interest in the future. WFZ is discussing with the California Mortgage Association and other industry groups about filing an amicus briefs to support FJM's anticipated Petition for Review by the California Supreme Court and, if accepted, the California Supreme Court review. T. Robert Finlay is a founding Partner of Wright Finlay & Zak.