By Kenneth Harney | The Washington Post Writers Group
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.
