While it’s not necessarily a huge concession, the top mortgage lender in the country has pledged to waive late fees for those who paid their mortgages late this month.
The move by San Francisco-based Wells Fargo is the result of the recent government shutdown, which lasted just over two weeks (October 1st-16th).
It’s unclear how many government employees with mortgages were actually affected by the shutdown, though Wells is the largest residential loan servicer in the land, managing some 12 million or so home loans.
Undoubtedly some individuals were affected out there…
A spokesman didn’t tell Reuters how much the bank charges in late fees, but one statement reviewed by the news service revealed that the typical late fee for a $200,000 loan with a 20-year term set at 3.3% is around $24.
That’s close to 2% of the monthly mortgage payment. It’s not uncommon for banks to charge 5% of the delinquent payment amount if sent in after the due date and grace period.
For the record, mortgage payments already tend to have 15-day grace periods that allow homeowners to pay until mid-month without any kind of penalty.
Watch Out for the Credit Hit
While it’s a sign of good faith by the bank and mortgage lender, or perhaps just a publicity stunt, the bigger issue to worry about is failing to pay within 30 days and getting a late payment recorded on your credit report.
The article didn’t indicate what would happen if borrowers were unable to make good on payments before that occurs, but I doubt Wells Fargo will extend that type of relief seeing that the shutdown is over.
You certainly don’t want a late payment to show up on your credit report, as it can cause your credit score to tank big time and jeopardize future refinancing attempts or home purchases.
While no other companies have announced similar efforts, it’s possible that various large (and small) banks will also offer similar late fee waivers, so contact your loan servicer if you were affected by the shutdown.
And always be sure to make your mortgage payments on time!