Lawsuit: Sun West Mortgage Discreetly Charged Post-Payment Interest on Mortgage

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Sun West Mortgage Company, Inc. is on the receiving end of a proposed class action lawsuit that alleges it charged a consumer post-payment interest on a mortgage insured by the Federal Housing Administration (FHA) without first providing proper disclosures. According to the complaint, FHA regulations allow lenders to charge a full month of interest on a loan that has been paid off as long as the borrower pays off the loan on a day “other than an installment due date” and the lender has provided the proper FHA disclosures. The complaint argues that after the plaintiff remitted the full unpaid balance of her mortgage, Sun West Mortgage illegally charged her a full month’s interest without first providing her a form that clearly indicated its intent to seek post-payment interest, the terms under which it would be collected, and the ways she could avoid paying the extra charge.