GGG, what is the posted rate? Do some customers pay the posted rate or is it just a high rate to be used for interest penalties and qualifications?
Also, do you have any idea how much profit the bank makes on the penalty? I understand that it has to be there so the bank doesn't lose if interest rates drop allowing everyone to switch their mortgage and leave the bank holding the bag.
It feels really high such that anyone who has to sell their home during the life of the term is backed into a corner.
They signed the contract and I don't think the calculation is all that complicated so I don't understand the lawsuit but I still think the penalty is excessive.
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