Question:

When are mortgage late fees charged?

Answer:

Mortgage late fees are charged when the mortgage payment is made after the 15th day payment was due. There will be several percent additional charge incurred on payments made 16 days or more after the due payment date. Mortgage late fees are incurred to discourage borrowers of being irresponsible about their mortgage payments. Also, repeated late payments are reported to the credit bureaus.

On the 16th or 17th day after a mortgage payment was due, the late borrower will be charged interest on the late payment. If they fail to clear late interest, the loan servicer may keep charging late interest even if the next mortgage payments are paid on time. Even though this doesn't happen as often as it used to be, it is possible that the loan servicer has such a practice. Needless to say, loan servicers are keeping those late fees by law.

Sometimes there are rip-off servicing companies, used as intermediary between borrowers and lenders, who fail to make mortgage payments on time, and at the same time charge mortgage interest and late fees.

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