Westmark Commercial Mortgage Fund IV v. Teenform Associates, L.P.

Teenform's (defendant) promissory note to mortgagee Westmark (plaintiff) provided for a six-percent late charge on overdue payments and a two-percentage-point interest increase (from eight to ten percent) upon default; when Teenform fell behind, Westmark imposed both charges and began foreclosure. Teenform argued the charges were unreasonable; the trial court found them reasonable and entered foreclosure judgment, and Teenform appealed.

Whether a mortgagee may impose reasonable late fees and default interest rates on a defaulting mortgagor.