It Pays to Read The Fine Print

Wednesday, February 27, 2008

In a mortgage refund, the bank holding the loan reimburses all interest, closing costs and broker fees to the borrower. The borrower pays the balance of the loan, usually with a new mortgage.

Relief Limited To:

Borrowers who have refinanced their mortgages or taken out a home equity loan may be eligible for a refund if they make a claim within three years of taking out the loan. Statutory damages are limited to $2,000, while actual damages are not capped, but borrowers must apply for monetary relief within one year of taking out the loan.

Regular mortgage holders may be eligible for monetary damages but not a refund. They must apply within one year of taking out the loan.

Claims can be triggered if:

Payment schedule is incorrect or does not conform to government guidelines in the Truth in Lending Act.

Disclosed annual percentage rate is off by 1/8 of a percent for regular mortgages or 1/4 of a percent for unorthodox mortgages from what the borrower is actually charged.

Lender miscalculates the total cost of the loan or the finance charges.

Key disclosures are not clear or buried in the fine print of final documents.

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