Temple Hills, MD asked in Real Estate Law for Maryland

Q: Can a mortgage company add fees to the loan that raises the balance, but not list the amount of the fee

Our mortgage was sold last year to another lender, and the new Servicer inflated the loan balance, but not listing the amount or what it is for

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1 Lawyer Answer
Cedulie Renee Laumann
Cedulie Renee Laumann
  • Crownsville, MD
  • Licensed in Maryland

A: A lender can only charge what fees the loan documents allow. While a borrower should carefully check the paperwork signed, normally if a mortgage is being paid on time the only charges allowed by the loan documents will be principal and interest plus any escrows (taxes/insurance). A borrower should have the right to periodic statements and should be able to track the balance with each statement.

If a loan is delinquent (past due) then the principal balance might increase because of late fees and accumulated unpaid interest being tacked onto the amount owed. The overwhelming majority of loans are set up so that the principal goes down over time. However, there are some kinds of loans called "negative amortizing" where the regular payment doesn't ever touch the principal and if the interest isn't paid each month the balance can actually go up.

If a normally amortizing mortgage is paid on time, the balance shouldn't increase. That said, there are many variables in loans and one would need to contact the lender to see what is going on.

While not legal advice, I hope the general information about mortgages offers some help. You are strongly encouraged to ask for detailed statements and/or call your lender to understand what is being charged.

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