Consumer complaint received 2022-05-13
Company: Lil' Wave Financial, Inc.
State: CA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
I am writing to request correction of the error described below in regard to the mortgage on my client 's property at XXXX XXXX XXXX XXXX XXXX XXXX XXXX 

An improper balloon charge for the above-referenced loan has been assessed under a {$300000.00} " Promissory Note Secured by Deed of Trust '' ( the " Note '' ) dated XX/XX/2020. 

The paragraph of the Note named " Balloon late charge states, " In addition, if any balloon payment is delinquent more than XXXX days, the borrower will be charged {$30000.00} as liquidated damages. '' The lender incorrectly assessed a {$30000.00} balloon payment in its demand payoff. I sent a error resolution request to the lender, and it failed to respond. I also have submitted a complaint to the California Department of Real Estate, and it failed to respond. 

1. The Note represents a " Higher Priced Mortgage Loan '' The Note represents a balloon payment loan and is subject to California 's Civil Code Section 2924i ( d ) ( 1 ), which defines a defines a " balloon payment loan '' to include a loan " which provides for a final payment as originally scheduled which is more than twice the amount of any of the immediately preceding six regularly scheduled payments ... '' The amount of each scheduled monthly payment was {$2500.00}, and the principal payment due upon termination of the loan was {$300000.00}, according to a letter from the lender. 

2. The amount of the balloon payment charge exceeds the amount of liquidated damages allowed to be collected under California law. Under Section 10242.5 ( c ) of the California Business and Professions Code, a late payment charge for a balloon payment " shall not exceed an amount equal to the maximum late charge that could have been assessed with respect to the largest single monthly installment previously due, other than the balloon payment, multiplied by the sum of one plus the number of months occurring since the late payment charge. '' 3.Even if it were incorrectly assumed that the balloon payment was of a permissible amount, Superior Loan Servicing failed to comply with the notice requirements set forth in California Civil Code Section 2924i. That law requires : At least 90 days but not more than 150 days prior to the due date of the final payment on a loan that is subject to this section, the holder of the loan shall deliver or mail by first-class mail, with a certificate of mailing obtained from the United States Postal Service , to the trustor, or his or her successor in interest, at the last known address of that person, a written notice which shall include all of the following : ( 1 ) A statement of the name and address of the person to whom the final payment is required to be paid.

( 2 ) The date on or before which the final payment is required to be paid.

( 3 ) The amount of the final payment, or if the exact amount is unknown, a good faith estimate of the amount thereof, including unpaid principal, interest and any other charges, such amount to be determined assuming timely payment in full of all scheduled installments coming due between the date the notice is prepared and the date when the final payment is due. 

Please respond to XXXX, the attorney for XXXX XXXX XXXX.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation