North Carolina Servicing Reference Guide
- Kacey Olson
| Citation | Topic | Requirement |
| N.C. Admin. Code tit. 4, 03M .0702(a) | Acknowledgment of Loss Mitigation Request | A mortgage servicer must acknowledge, in writing, a borrower's loss mitigation request no later than 10 business days after the request. The acknowledgement must identify any information needed from the borrower in order for the mortgage servicer to consider the borrower's loss mitigation request. |
| Mortgage Debt Collection and Servicing Act / N.C. Gen. Stat. §45-93 | Borrower Requests for Information | Within 10 business days of receipt of a written request from the borrower that includes or otherwise enables the servicer to identify the name and account of the borrower and includes a statement that the account is or may be in error or otherwise provides sufficient detail to the servicer regarding information sought by the borrower, the servicer must provide a written statement to the borrower that contains information required under N.C. Gen. Stat. §45-93. Within 25 business days of receipt of a written request from the borrower as described above. the servicer must provide additional information. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-82.1 | Certificate of Extension of Period for Advances under Equity Line of Credit | The period for advances agreed to may be extended by written agreement of the lender and borrower executed and registered prior to expiration or termination of the equity line of credit or the borrower's obligation to repay any outstanding indebtedness. Any extended period shall not exceed 30 years from the end of the preceding period for advances. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.7A | Credit Suspension Directive-Notice to Borrower | A credit suspension directive may be given to a secured creditor by any of the following: (1) any borrower; (2) the legal representative of any borrower; (3) the attorney for any borrower; and (4) an attorney licensed to practice law in the State of North Carolina or a bank, savings and loan association, savings bank, or credit union, but only when (i) the attorney, bank, savings and loan association, savings bank, or credit union is responsible for the disbursement of funds in connection with the sale of, or a new loan secured by, real property then encumbered by an existing security instrument; (ii) a requirement of the sale or new loan transaction is that the property be conveyed or encumbered free and clear of the lien of the existing security instrument; and (iii) the credit suspension directive is given to the secured creditor contemporaneously with a notification requesting a payoff statement or a short-pay statement in anticipation of and in preparation for the imminent settlement of the sale or new loan transaction. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-91 | Crediting of Payments | All amounts received by a servicer on a home loan at the address where the borrower has been instructed to make payments must be accepted and credited, or treated as credited, within 1 business day of the date received, so long as that the borrower has made the full contractual payment and has provided sufficient information to credit the account. If a servicer uses the scheduled method of accounting, any regularly scheduled payment made prior to the scheduled due date must be credited no later than the due date. If any payment is received by a servicer and not credited, or treated as credited, the borrower must be notified within 10 business days by mail at the borrower's last known address of the disposition of the payment, the reason the payment was not credited, or treated as credited to the account, and any actions necessary by the borrower to make the loan current. See citation for when notification is not necessary. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.6(d) | Document of Rescission | (d) A person that erroneously or wrongfully records a document of rescission is liable to any person injured thereby for the actual loss caused by the recording and reasonable attorneys' fees and costs. (e) A document is a document of rescission if it does all of the following: (1) Identifies the related security instrument, including the type of security instrument, the original parties to the security instrument, the recording data for the security instrument, and the office in which the security instrument is recorded. (2) If the document of rescission is intended to rescind a release that was recorded in error, (i) identifies the release that was recorded in error by its recording data and the office in which it is recorded, (ii) states that the release was recorded in error, and (iii) states that the release is rescinded. (3) If the document of rescission is intended to rescind the erroneous satisfaction of record of a security instrument, (i) identifies the satisfaction document that was recorded in error by its recording data and the office in which it is recorded, (ii) states that the security instrument was erroneously satisfied of record, and (iii) states that the satisfaction of the security instrument is rescinded and the security instrument reinstated. (4) States that the person signing the document of rescission is either (i) the secured creditor or (ii) the person who caused the release to be recorded in error or the security instrument to be erroneously satisfied of record. (5) Is signed and acknowledged as required by law for a conveyance of an interest in real property. |
| Secure and Fair Enforcement Mortgage Licensing Act / N.C. Gen. Stat. §53-244.111 | Force-Placed Insurance | A mortgage servicer must provide written notice to a borrower upon taking action to place hazard, homeowner's, or flood insurance on the mortgaged property. A servicer may not place such insurance if the servicer knows or has reason to know that such insurance is in effect. A mortgage servicer may not place hazard, homeowner's, or flood insurance on a mortgaged property for an amount that exceeds either the value of the insurable improvements or the last known coverage amount of insurance. |
| N.C. Admin. Code tit. 4, 03M .0703 | Foreclosure Deferral | (a)Â A mortgage servicer shall not initiate or further a foreclosure proceeding or impose a charge incident to a foreclosure proceeding during the pendency of a loss mitigation request. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. § 45-107 | Foreclosure Notice Certification | Foreclosure notices filed on home loans must contain a certification by the filing party that the pre-foreclosure notice required by G.S. 45-102 and the pre-foreclosure information required by G.S. 45-103 were provided in compliance with the law and that the periods of time established have elapsed. |
| NC Secure and Fair Enforcement Mortgage Licensing Act | N.C. Gen. Stat. §24-10.1(b) | Late Payment Fees | (b)       No lender may charge a late payment charge: (1)       In excess of four percent (4%) of the amount of the payment past due; or (2)       In excess of the amount disclosed with particularity to the borrower pursuant to the provisions of the Federal Consumer Credit Protection Act if the transaction is one to which the provisions of that act apply, which in no event shall exceed four percent (4%); or (3)       For any payment unless past due for 15 days or more; provided, however, if the loan is one on which interest on each installment is paid in advance, no late payment charge may be charged until the payment is 30 days past due or more; or (4)       More than once with respect to a single late payment. If a late payment charge is deducted from a payment made on the contract and such deduction results in a subsequent default on a subsequent payment, no late payment charge may be imposed for such default. If a late payment charge has been once imposed with respect to a particular late payment, no such charge shall be imposed with respect to any future payment which would have been timely and sufficient but for the previous default; provided that when a borrower fails to make an installment payment, and the terms of the loan agreement provide that subsequent payments shall first be applied to the past due balance, and the borrower resumes making installment payments but has not paid all past due installments, then the lender may enforce the contract according to its terms, imposing a separate late payment charge for each installment that becomes due until the default is cured; or (5)       On any loan which by its terms calls for repayment of the entire balance in a single payment and not for installments of interest or principal and interest; or (6)       Unless the lender notifies the borrower within 45 days following the date the payment was due that a late payment charge has been imposed for a particular late payment which late payment must be paid unless the borrower can show that the installment was paid in full and on time. No late payment charge may be collected from any borrower if the borrower informs the lender that non-payment of an installment is in dispute and presents proof of payment within 45 days of receipt of the lender's notice of the late charge. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.24 | Lien Maturity Extension Agreement | Unless the lien of a security instrument has been extended, foreclosed, or satisfied, the lien of a security instrument automatically expires. |
| N.C. Admin. Code tit. 4, 03M .0702(b) | Loss Mitigation Application Evaluation | (b)Â A mortgage servicer shall respond to a loss mitigation request from a borrower no later than 30 business days after the receipt of all information necessary from the borrower to assess whether or not a borrower qualifies for any loss mitigation programs offered by the mortgage servicer. |
| N.C. Admin. Code tit. 4, 03M .0702(c) | Loss Mitigation Denial | (c)Â A mortgage servicer shall include in a final response denying a loss mitigation request the reason for the denial and contact information for a person at the mortgage servicer with authority to reconsider the denial. In addition, the denial shall also include the following statement, in a boldface type and in a print no smaller than the largest print used elsewhere in the main body of the denial: "If you believe the loss mitigation request has been wrongly denied, you may file a complaint with the North Carolina Office of the Commissioner of Banks website, www.nccob.gov." |
| N.C. Gen. Stat. § 45‑21.21(g) | Notice of Cancellation of Foreclosure Sale | If it is determined that the sale cannot be held in accordance with this section or is postponed pursuant to this section, then the person exercising the power of sale shall, immediately upon determining that the sale will not occur and prior to the scheduled time of the sale, deliver a written notice to the Clerk of Superior Court that is to include all of the following: (1) The case number assigned by the Clerk. (2) The mortgagor(s) and record owner(s) name(s). (3) The United States Postal Service address of the property or, if no address has been assigned, a brief description of the location of the property. (4) The originally scheduled date and time for the sale. (5) A statement that the foreclosure sale has been withdrawn, rescheduled for a specific date and time, or postponed with no date yet set, as appropriate. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-38 | Notice of Foreclosure After Sale | In case of foreclosure of any deed of trust, or mortgage, the trustee, mortgagee, or the trustee's or mortgagee's attorney must record a notice of foreclosure and, whenever it is practical to do so, may also enter upon the margin of the record of the deed of trust or mortgage of the fact that the foreclosure and the date when, and the person to whom, a conveyance was made by reason of the foreclosure. In the event the entire obligation secured by a mortgage or deed of trust is satisfied by a sale of only a part of the property embraced within the terms of the mortgage or deed of trust, the trustee, mortgagee, or the trustee's or mortgagee's attorney shall indicate in the notice of foreclosure which property was sold and which was not sold, and may make an additional notation indicating the same, whenever practical. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-21.16(a) | Notice of Hearing | After the notice of hearing is filed, it must be served to each party entitled to the notice not less than 10 days prior to the date of hearing. The notice must be served and proof of service must be made in any manner provided by the Rules of Civil Procedure for service of summons, including service by registered mail or certified mail, return receipt requested. If service upon a party cannot be effected after a reasonable and diligent effort, service may be made by posting a notice in a conspicuous place and manner upon the property not less than 20 days prior to the date of the hearing. If service is obtained by posting, an affidavit must be filed with the clerk of court showing the circumstances warranting the use of service by posting. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.24 | Notice of Maturity Date | The lien of a recorded security instrument may be extended by a notice of maturity date, provided it is recorded before the lien expires. |
Notice of Sale | Must be posted, in an area designated by the clerk of superior court, for at least 20 days immediately preceding the sale, and be published once a week for at least 2 successive weeks in a newspaper in the county where the property is located. The period from the date of the first publication to the date of the last publication, both dates inclusive, may not be less than 7 days, including Sundays. The date of the last publication must be not more than 10 days preceding the date of the sale. When the property to be sold is situated in more than 1 county, the above provisions must be complied with in each county in which any part of the property is situated. | |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.22 | Partial Release of Lien | A document is a partial release if it does all of the following: (1) identifies the type of security instrument, the original parties to the security instrument, the recording data for the security instrument, and the office in which the security instrument is recorded; (2) states that the person signing the partial release is the secured creditor or, if the security instrument is a deed of trust, that the person or persons signing the partial release is or are the secured creditor, the trustee, or both the secured creditor and the trustee; (3) contains language releasing property or an interest in property from the lien of the security instrument; and (4) is signed and acknowledged as required by law for a conveyance of an interest in real property by the secured creditor or, if the security instrument is a deed of trust, by the secured creditor, the trustee, or both the secured creditor and the trustee. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.7 | Payoff Statement | Within 10 days after the effective date of a notification, the secured creditor must issue a payoff statement or short-pay statement and send it to the borrower or authorized agent. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-21.12A | Power of Sale Barred During Military Periods | A mortgagee, trustee, or other creditor may not exercise a power of sale contained in a mortgage or deed of trust, or provided by statute, during, or within 90 days after, a mortgagor's, trustor's, or debtor's period of military service. The clerk of court may not conduct a hearing unless the mortgagee, trustee or other creditor seeking to exercise a power of sale files with the clerk a certification that the hearing will take place at a time that is not during, or within 90 days after, a period of military service for the mortgagor, trustor or debtor. This applies only to mortgages and deeds of trust that originated before the mortgagor's or trustor's period of military service. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-102 | Pre-Foreclosure Notice Required for Home Loans | At least 45 days prior to the filing of a notice of hearing in a foreclosure proceeding on a primary residence, mortgage servicers of home loans must send written notice by mail to the last known address of the borrower to inform the borrower of the availability of resources to avoid foreclosure. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-82.2 | Request to Terminate an Equity Line of Credit | Upon receipt of a request from an authorized person to terminate an equity line of credit, the lender must terminate the borrower's right to obtain advances under the borrower's equity line of credit; apply all sums subsequently paid by or on behalf of the borrower in connection with the equity line of credit to the satisfaction of the equity line of credit and other sums secured by the related equity line security instrument; and when the balance of all outstanding sums secured by the related equity line security instrument becomes zero, satisfy the related equity line security instrument as a matter of public record. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-36.11 | Satisfaction of Security Instrument | The state offers a standard form and an alternative form. See N.C. Gen. Stat. §45-36.11 for additional information. A secured creditor must submit for recording a satisfaction of a security instrument within 30 days after the creditor receives full payment or performance of the secured obligation. See the citation for details regarding the failure to submit within 30 days. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-91 | Servicer Fee Assessment and Statement | Any fee that is incurred by a servicer must be both: (1) assessed within 45 days of the date on which the fee was incurred (attorney or trustee fees and costs incurred as a result of a foreclosure action must be assessed within 45 days of the date they are charged by either the attorney or trustee to the servicer.); and (2) explained clearly and conspicuously in a statement mailed to the borrower at the borrower's last known address within 30 days after assessing the fee, provided the servicer will not be required to take any action in violation of the provisions of the federal bankruptcy code. Servicer is not required to send a statement for a fee that: (1) results from a service that is affirmatively requested by the borrower; (2) is paid for by the borrower at the time the service is provided; and (3) is not charged to the borrower's loan account. |
| Reverse Mortgage Act / N.C. Gen. Stat. §53-265(b) | Statement of Account | On an annual basis and when the loan becomes due, the lender must issue to the borrower, without charge, a statement of account regarding the activity of the mortgage for the preceding calendar year, or for the period since the last statement of account was provided. |
| Mortgages and Deeds of Trust / N.C. Gen. Stat. §45-103(a) | Submission of Pre-Foreclosure Home Loan Information to Database | Within 3 business days of mailing the pre-foreclosure notice for subprime loans, the mortgage servicer must file certain information in electronic format with the Administrative Office of the Courts. |
| Secure and Fair Enforcement for Mortgage Licensing Act / N.C. Gen. Stat. §53-244.110(6) | Transfer of Servicing Rights | At the time a servicer accepts assignment of servicing rights for a mortgage loan, the servicer must disclose to the borrower all of the following: (a) any notice required by RESPA or by regulations promulgated thereunder; (b) a schedule of the ranges and categories of its costs and fees for its servicing-related activities, which must comply with North Carolina law and which may not exceed those reported to the Commissioner; (c) a notice in a form and content acceptable to the Commissioner that the servicer is licensed by the Commissioner and that complaints about the servicer may be submitted to the Commissioner; and (d) any notice required by Article 2A, 4, or 10 of Chapter 45 of the General Statutes. |