Question: I am behind on my mortgage payments. The bank’s foreclosure sale is about a month away. We know someone who is willing to loan us some money at a high interest rate – 25%. We really appreciate the help, but is this something that is even legal?

Answer: Hypothetically, your savior lender can charge an interest rate of 100%. The law only requires the lender to notify the Attorney General’s Office, of their intent to accommodate a high interest rate loan. Also, the lender must maintain records of your loan documents, in case the Attorney General wants to inspect them.

What exactly does the law consider a high interest loan? This can depend on which state you live in and their specific laws to follow. Rates higher than 20% are considered usurious and illegal without notice to the Attorney General. Notifying them is super important, because the criminal penalty can range to up to 2.5 years in prison or a fine of approximately $5,000.

In your case, decide if you are taking on too much debt to keep your house. It is clever to stop digging when you are stuck in a hole.

Attorney James Haroutunian practice includes real estate, probate, and estate planning law. Contact him to begin your estate plan or with questions at the Haroutunian Law Office at 790 Boston Road, Billerica, 978-671-0711, or email at