If I’m the lender on a mortgage, what are my rights to late payments fees?

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If I’m the lender on a mortgage, what are my rights to late payments fees?

I did a mortgage from my IRA. The borrower has been late on just about every monthly payment for 3 years. The contract states that after 10 days, I can charge 10% interest on his interest only monthly payment. How far back now (months, years) in past payments can I go to request interest on late payments? Also, the mortgage was to be paid off a month ago. He decided not to and now wants to pay it off tomorrow. Can I charge him the over 10 days late 10% interest on the whole principal as well? Any help would be greatly appreciated.

Asked on November 30, 2015 under Real Estate Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) You can only charge him what the terms of the mortgage/agreement allow you to charge, so if the agreement says you can only charge late fees on the interest-only monthly payments, you can't charge him a late fee on the principal. Review the agreement to see what you can and can't charge--again, you can only charge things which the agreement expressly says you can.
2) You can't charge late fees on late fees.
3) The statute of limitations (or time within which to sue) in your state for written agreements is 5 years; you can potentially sue for anything owed & unpaid, including late fees, from up to 5 years ago from when you file the suit.


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