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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
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Experience:  JA Mentor
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What is the legal % amount the mortgagor can charge the

Customer Question

what is the legal % amount the mortgagor can charge the mortgagee on late fees in a given month
Submitted: 9 months ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 9 months ago.

Hi,

I'm Lucy, and I'd be happy to answer your questions today.

New Jersey law allows a mortgagor to charge up to 5% of the past due payment as a late fee. When a mortgagor charges more than that, the NJ Homeowner's Security Act of 2002 provides that the homeowner may sue for the excess amount charges, punitive damages, plus attorney's fees. Here is a summary of the act:

http://www.nj.gov/dobi/division_consumers/finance/hoa03summary.htm

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Customer: replied 9 months ago.
is it the past due amount or the principe and interest?
Expert:  Lucy, Esq. replied 9 months ago.

The late fee is a percentage of the past due amount, not the total owed on the mortgage.

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