Can I use mediation or arbitration to resolve my dispute with the lender over loan transfer and account access? – North Carolina

Short Answer

Sometimes. In North Carolina, mediation is often available by agreement and can be a practical way to get the lender or servicer to correct account access problems and clarify “successor in interest” status, especially before any foreclosure is filed. Arbitration depends on whether the note, deed of trust, or servicing agreements include an arbitration clause; if they do, arbitration may be required, but it can also limit court remedies and discovery.

Understanding the Problem

In North Carolina, can a surviving spouse use mediation or arbitration to force a lender or mortgage servicer to recognize a transfer of the home after a death, restore mortgage account access, and correctly apply payments when the lender says a “successor in interest” form is required? The issue usually turns on whether a contract requires arbitration, whether the lender will agree to voluntary mediation, and whether a foreclosure (or similar court filing) has started that triggers court-connected settlement processes.

Apply the Law

North Carolina does not have one single “mortgage mediation” statute that applies to every lender dispute. Instead, the ability to use mediation or arbitration usually comes from (1) the loan documents (note and deed of trust), (2) any written servicing policies or agreements the parties signed, and (3) North Carolina and federal servicing rules that require servicers to handle borrower inquiries, account information, and servicing transfers in a compliant way. Even when arbitration is available, a borrower can often still use formal written dispute channels to create a record and push for account corrections.

Key Requirements

Contract authority: Arbitration usually happens only if an arbitration clause covers the dispute (often in the note or a related agreement). Mediation usually requires agreement unless a court orders it in a pending case.
Proper party and standing: The dispute needs to be raised by the person the servicer must treat as the borrower or a verified successor in interest, or by an authorized representative with proper documentation.
Clear issue definition and documentation: Mediation and arbitration work best when the request identifies the exact problems (account access, payment application, lien placement, transfer of servicing/loan) and is supported by key documents (death certificate, deed showing survivorship, recorded instrument, proof of payments, and prior correspondence).

What the Statutes Say

N.C. Gen. Stat. § 53-244.110 (Mortgage servicer duties) – Requires mortgage servicers to safeguard and account for borrower funds and act with reasonable skill and care, among other duties.
N.C. Gen. Stat. § 53-244.111 (Prohibited acts) – Prohibits, among other things, failing to account for funds and failing to comply with certain mortgage servicing transfer and borrower inquiry requirements imposed by federal law.

Analysis

Apply the Rule to the Facts: The facts describe a surviving spouse who signed the deed of trust, has been making payments, but cannot access account information and is being told the spouse is not “on the mortgage” without successor paperwork. That combination points to (1) a standing/authorization problem in the servicer’s system (who can receive information and give instructions) and (2) a payment accounting problem (whether payments are posted correctly), both of which are issues that mediation can address quickly if the lender participates. Arbitration may be available only if the loan documents require it; if there is no arbitration clause, arbitration is typically not an option unless both sides agree after the dispute arises.

Process & Timing

Who initiates: The surviving spouse (or attorney) starts by requesting a copy of the note/deed of trust and the servicer’s dispute or “borrower inquiry” address and procedures. Where: With the mortgage servicer’s designated correspondence address and through any secure upload portal the servicer provides. What: A written demand for (a) successor in interest review, (b) restoration of account access, and (c) a full payment history/transaction ledger. When: As soon as access is lost or a lien/negative action is reported.
Mediation track (voluntary or court-connected): If the lender is willing, the parties can schedule private mediation with a neutral mediator and exchange the minimum documents needed to correct the servicing record. If a foreclosure or related civil case is filed, mediation may be available as part of the court process; timing and availability can vary by county and case type.
Arbitration track (if required by contract): If an arbitration clause applies, a demand is filed with the arbitration administrator named in the clause (or as the clause specifies). The arbitrator then sets deadlines for document exchange and a hearing, and issues a written decision.

Exceptions & Pitfalls

Arbitration clause surprises: Some loan-related agreements include arbitration terms with short deadlines, limits on discovery, or restrictions on class claims. The clause language controls.
“Successor in interest” verification gaps: Even when title passes by survivorship, a servicer may still require specific documents to verify the right to receive account information and give instructions. Missing paperwork often stalls both mediation and account corrections.
Mixing up note vs. deed of trust: Signing the deed of trust often shows consent to the lien on the property, but the note controls who owes the debt. Dispute strategy (and whether arbitration applies) may differ depending on which document contains which terms.
Payment posting and escrow issues: When online access is cut off, borrowers often lose visibility into whether payments, fees, and escrow disbursements were applied correctly. A mediation session works best when it includes the servicer’s full transaction history and an explanation of any “suspense” account handling.

Conclusion

In North Carolina, mediation can be a practical way to resolve a lender dispute over successor paperwork, loan transfer records, and loss of account access, but it usually requires the lender’s agreement unless a case is already in court. Arbitration is possible only if an arbitration clause applies to the dispute. The next step is to obtain and review the note and deed of trust for any arbitration clause and submit a written successor-in-interest and payment-accounting request to the servicer promptly, especially if any foreclosure notice is pending.

Talk to a Real Estate Attorney

If a lender or servicer is refusing to recognize a surviving spouse, cutting off mortgage account access, or not clearly applying payments, experienced attorneys can help evaluate mediation versus arbitration, protect timelines, and push for corrected servicing records. 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.