Beal v. First Fed. Sav. & Loan Asso. of Madison

The principal question posed here is whether a federal savings and loan association which has extended a loan for the maximum thirty-year period and determined by mutual agreement with the borrower what the monthly payments will be can, by the activation of an interest-escalation clause, increase the amount of money to be allocated for the payment of interest out of each monthly payment for the early years of the loan and thereafter sharply reduce the amount to be allocated to interest, this providing for the payment of the note within the original thirty-year period.

We conclude that this…