Marc's Mortgage Matter's

Up until recently I lay awake at night, wondering if I got cheated when I had to make my standard mortgage payment in February, since it only has 28 days. A California appellate court has rejected a class action lawsuit by Julie and Kenneth Puentes claiming Wells Fargo unfairly treated customers in its calculation of monthly interest rates for February (the shortest month of the year) as “unfair” and entitling plaintiffs to “overpayments.” The plaintiffs had argued that because the industry’s calculation of a month represented 30.4 days—and because February has only 28 days—that the calculation unfairly charged them for February and they were entitled to a refund of their “overpayment,” plus damages. The attorney said that “The Puenteses conveniently ignored the fact that longer months like August or October were also treated as 1/12th of a year, a bonus to consumers.” Had the plaintiffs succeeded, it could have undermined not only how mortgage companies calculate interest rates, but also the uniformity of the secondary market as a whole. And folks wonder why there are so many attorneys out there.

Washington State will revoke the license of Paramount Equity Mortgage due to its deceptive lending practices. The Roseville, California-based firm was fined $500,000 and required restitution for Washington borrowers. “The state alleges Paramount engaged in a number of deceptive lending practices, including charging and collecting unearned fees, charging consumers to buy down interest rates without actually reducing the rate, failing to make required disclosures and making state and federally-required disclosures in a deceptive manner. Paramount is also accused of conducting a deceptive advertising campaign.” I predict many more will fall including more big name lenders, that had practiced similar tactics for years. More to come!