Earns_Wells_Fargo-05804-4209Lawsuit says banks improperly failed to inform consumers about extra interest

 

This is a washington post article.

 

For years it was widely considered a massive, government-sanctioned rip-off of home-mortgage borrowers. Then it was banned by the Consumer Financial Protection Bureau. And now it’s the subject of class-action suits that accuse four large banks of illegally collecting millions of dollars in excess mortgage-interest payments from their customers.

The source of all the controversy: The Federal Housing Administration’s long-time policy of allowing banks to charge homeowners a full month’s worth of interest when they went to pay off their FHA-insured loans — even after they had paid back all the principal they owed.

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