Can I force the lender to accept late mortgage payments after they previously agreed to them? – North Carolina

Short Answer

Generally, no. In North Carolina, a lender’s past acceptance of late payments does not require it to keep accepting them unless there is a signed, enforceable modification or reinstatement agreement. The Clerk of Superior Court cannot order the lender to take late payments at the foreclosure hearing. To stop a power-of-sale foreclosure, you must seek an injunction in Superior Court (often with a bond) or file bankruptcy. If the sale happens and brings more than what is owed, you can claim surplus funds.

Understanding the Problem

In North Carolina, can a homeowner force a mortgage lender to accept late payments and stop a scheduled power-of-sale foreclosure after the lender previously took late payments? Here, one loan modification was rejected for improper notarization.

Apply the Law

North Carolina uses power-of-sale foreclosure. The Clerk of Superior Court holds a limited hearing focused on specific items (such as default, holder status, and notices). The Clerk cannot grant equitable relief or enforce informal payment arrangements. If you want a court-ordered pause or to compel different treatment, you must file in Superior Court to seek an injunction. Separately, if a foreclosure sale occurs, the trustee files a report of sale and a 10-day upset-bid window opens. After that window closes without a new bid, rights become fixed, and any surplus proceeds are handled by the Clerk through a special proceeding to determine who gets paid.

Key Requirements

• No automatic right to force acceptance: Prior acceptance of late payments does not obligate the lender absent a signed, enforceable modification or reinstatement agreement.
• Clerk’s hearing is limited: The Clerk decides narrow statutory issues; defenses like waiver, estoppel, or unfair practices must go to Superior Court.
• Injunction route: To stop a sale, file in Superior Court for an injunction; judges commonly require a bond and prompt scheduling.
• Bankruptcy stay: Filing bankruptcy triggers an automatic stay that pauses most foreclosure actions until the bankruptcy court says otherwise.
• Upset bids and finality: A 10-day upset-bid period follows the report of sale; if no new bid is filed, parties’ rights become fixed.
• Surplus funds: After paying costs and liens, any surplus is deposited with the Clerk and disbursed by order after a petition and notice to claimants.

What the Statutes Say

• North Carolina Gen. Stat. § 45-21.16 (Power-of-sale hearing) – Clerk’s limited findings to authorize foreclosure.
• North Carolina Gen. Stat. § 45-21.34 (Injunction) – Superior Court may enjoin sale on proper showing, often with bond.
• North Carolina Gen. Stat. § 45-21.27 (Upset bids) – 10-day upset-bid process and extensions.
• North Carolina Gen. Stat. § 45-21.31 (Application of proceeds; surplus) – Order of payments and surplus handling.

Analysis

Apply the Rule to the Facts: Because the notarization defect prevented a finalized, signed modification, there is no enforceable agreement that requires the lender to continue accepting late payments. The Clerk cannot decide equitable issues like waiver or estoppel at the foreclosure hearing. If you want the court to consider the lender’s prior acceptance of late payments, you must seek an injunction in Superior Court, and the judge may require a bond. If the sale proceeds and net proceeds exceed the debt and costs, you can petition the Clerk to disburse surplus funds to you after the upset-bid period closes.

Process & Timing

1. Who files: Homeowner/borrower. Where: Superior Court in the county where the property sits. What: Civil complaint and motion for a temporary restraining order/preliminary injunction under the foreclosure statute. When: File before the sale; judges often set hearings quickly and may require a bond.
2. If the sale occurs: the trustee files a report of sale with the Clerk within a few days, starting a 10-day upset-bid period. Each new upset bid restarts the 10-day clock.
3. After the upset-bid period ends without a new bid: rights become fixed. If there is a surplus, it is deposited with the Clerk. File a petition or motion for surplus proceeds in the foreclosure file (or as directed locally). The Clerk will notice interested lienholders and enter an order disbursing funds.

Exceptions & Pitfalls

• Nonwaiver clauses in deeds of trust often defeat arguments that prior late-payment acceptance permanently waived strict enforcement.
• Oral promises to modify or accept late payments are risky; courts typically require a signed writing to enforce mortgage changes.
• Waiting too long: if you seek an injunction after the sale or after the upset-bid period closes, relief is much harder to obtain.
• Bond issues: failing to post a required injunction bond can prevent or dissolve the injunction.
• Surplus is not “free money”: junior liens, HOA liens, tax liens, and judgments may get paid from surplus before you do.

Talk to a Surplus Funds Attorney

If you’re dealing with a scheduled foreclosure and want to stop the sale or recover surplus funds, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.