State Law Update: North Dakota Amends Mortgage Late Payment Fee Restrictions

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Last month, North Dakota enacted SB 2136, which altered provisions related to late mortgage payment fees. Effective August 1, 2013, a charge for a late payment penalty may be imposed only if the amount of the late charge or the method of calculation of the late charge has been agreed to by the parties in the loan documents that are signed by the borrower. Under current law, servicers can charge up to $15 or 15% of the late payment, whichever is less, unless otherwise agreed to in the real estate note or mortgage. The new law also removes language stating that any contract attempting to make the rate of interest higher after maturity is void as to the increase of interest. Instead, the new law will allow parties to agree in writing to a different rate of interest after maturity.

Topics:  Fees, Late Payments, Mortgage Interest, Mortgages

Published In: General Business Updates, Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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