Usurious Limits on Person to Person Installment Notes in CA

[TaoWanderer]

What is the name of your state? CA

I am a NV resident and sold an improved 4 acre land in CA for $195,000 with $20,000 down and myself carried the remaining $175,000 as an Installment Note at 10% interest rate for 7 years with a late penalty of 20% of the monthly payment 10 days after the due date. The payments are $2905.21 per month. I sold the property at the end of July ‘07. The buyer still owes me $500 from the October payment not including the late penalty.

How can I make them to pay the money they owe me?

Should the delinquent $500 continue to accrue interest every month?

Here is the exact wording of the contract regarding the late penalty:
“LATE CHARGE: A late charge of 20% of the monthly payment shall be due in the event payment is received later than 10 days from which it is due.”

Is there a way I can report their late payment to the credit bureaus?

At what point should I consider foreclosure?

Also someone brought to my attention now that my contract might be in violation of usurious limits of CA, however, my escrow person who helped me write the note didn't mention anything about it.

Are there usurious limits on the interest rate and late penalty on a person to person installment note in California? If so, what are they, please?

If the contract is in violation of usurious limits what are the consequences?

Thank you very much in advance for your gracious help.What is the name of your state?

 

[efflandt]

To make it as clear as mud, you can start with http://ag.ca.gov/consumers/general/usury.htm

Not sure how that plays out for late payment fees (I am not a legal expert, just a home owner). But any shortage does not deduct from principal, and should at least continue to accrue interest until it is paid with interest.

Hopefully your contract spells out when they are in default and the actions you can take.

Parts that can make it confusing (bold emphasis added) is "In regard to usury, a loan to be used primarily for home improvement or home purchase is not regarded as a loan for personal, family or household purposes." and "The usury laws do not apply to any real estate broker if the loan is secured by real estate. This applies whether or not he or she is acting as a real estate broker." and "In transactions for the purchase of goods or services which are not for personal, family or household purposes, there are normally no limits to finance charges except those set by the parties."

 

[LindaP777]

I don't see how you can force them to pay the late fee right now. Even if you sue them, that doesn't take the money out of their pocket.
Why don't you wait until the land is paid for and they want their mortgage removed from the title.
Send them a reminder notice now so they are aware.

 

[TaoWanderer]

Would the $581.04 late fee be added to the principal immidiately and thus go up at the same 10% rate as the rest of the principle?