Below is an excerpt from the home loan contract Kyle signed with his bank. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule.
The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies.
In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.”
Kyle failed to make his payment by the first of this month. Kyle’s monthly payment is currently $1,200. If Kyle decides to split the missing payment into two parts and pay it over the next two months, which of the following statements is false?
a.
Kyle will be reported to a credit agency.
b.
Kyle will be charged a $75 late fee for the missing payment.
c.
Kyle has one business week to inform his bank of the late payment.
d.
Kyle’s monthly payments for the next two months will remain $1,200.