Jan252026
Probate Q&A Series

What happens if the lender refuses to accept my payments even though I’m trying to catch up? – North Carolina

Short Answer

In North Carolina, a mortgage servicer generally must accept and promptly credit a full contractual payment that is sent to the correct payment address, and it must explain in writing if it does not credit a payment. If the titled owner has died, payment problems often happen because the servicer will not talk to (or take instructions from) someone who is not yet recognized as the estate’s personal representative or the lender’s “successor in interest.” If foreclosure has started, North Carolina law also allows the debt to be paid or tendered (including required foreclosure expenses) to stop a power-of-sale foreclosure before the sale is completed.

Understanding the Problem

Under North Carolina probate and real estate practice, the key question is what happens when a mortgage lender or servicer will not accept payments on a home after the titled owner has died, even though a family member living in the home is trying to catch up. The decision point is whether the payment refusal is happening because the payer lacks legal authority to act for the deceased owner’s estate, or because the loan is already in default and the servicer is insisting on a different amount or process to reinstate or pay off the loan.

Apply the Law

North Carolina has borrower-protection rules for how servicers process payments on “home loans,” and it also has a structured foreclosure process (most commonly a power-of-sale foreclosure) that runs through the Clerk of Superior Court in the county where the property sits. When a borrower dies, probate authority matters: the person with legal authority to deal with the mortgage is typically the court-appointed personal representative (executor/administrator), and servicers often require documentation before they will accept instructions, discuss arrears, or approve a workout plan. Even so, North Carolina law provides tools to document tender, demand proper accounting, and—if foreclosure is pending—stop the sale by paying what the statute requires before the sale becomes final.

Key Requirements

  • Proper payment and documentation: The servicer typically expects payments to come with enough information to credit the correct loan, and it may require proof of authority (for example, letters of administration/testamentary) when the titled owner has died.
  • Clear accounting of what is needed to cure: Before catching up, the household needs a reliable breakdown of past-due amounts, fees, and the total needed to bring the loan current or reinstate.
  • Foreclosure stage matters: If a power-of-sale foreclosure is underway, the timeline and required amounts change, and stopping the sale may require paying not only the delinquency but also certain foreclosure expenses.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the home was titled in relatives’ names, and both titled owners later died while the household member continued living in the property and trying to manage the bills and mortgage. In that situation, a servicer may refuse to accept “catch-up” payments (or refuse to discuss the account) because the payer is not yet recognized as the person who can act for the deceased owner’s estate, or because the servicer says the amount sent is not the “full contractual payment” or not the full amount needed to cure the default. If foreclosure has started, North Carolina law also gives a way to stop the sale by paying or tendering the secured debt plus required foreclosure expenses before the sale becomes final, but the exact amount and timing become critical.

Process & Timing

  1. Who files: The lender/trustee files the foreclosure. Where: The Clerk of Superior Court in the county where the property is located. What: A notice of hearing is filed and served in a power-of-sale foreclosure. When: The notice of hearing must be served at least 10 days before the hearing date.
  2. Payment refusal documentation: If a payment is sent and not credited, keep proof of delivery and copies of the check/money order and cover letter. For many home loans, the servicer must either credit a full contractual payment quickly or send a written notice explaining what happened and what is needed to make the loan current.
  3. Stopping a pending sale: If the case is already in foreclosure, the payoff/cure amount usually includes more than missed monthly payments (for example, trustee/attorney costs and other sale-related expenses). Under North Carolina’s power-of-sale rules, paying or tendering the required amounts can terminate the foreclosure if done before the sale is completed (including during the upset-bid period).

Exceptions & Pitfalls

  • “Not the right person” problem after a death: A servicer may refuse to take instructions or apply payments correctly until it receives probate paperwork showing who has authority for the estate. Opening an estate and getting a personal representative appointed often unlocks communication and clearer payoff/cure figures.
  • Sending partial payments: If the loan is in default, sending amounts that do not match what the servicer requires to reinstate (or that lack identifying information) can lead to returns, suspense accounts, or misapplication. Written confirmation of the exact cure amount and where/how to send it helps avoid this.
  • Foreclosure costs and tender issues: Once foreclosure is underway, stopping the sale may require paying not only the missed payments but also foreclosure expenses. Tender disputes can arise if the amount is short or delivered in a form the trustee will not accept.
  • Mailing to the wrong address: Servicers often designate a specific address for payments versus correspondence. Payments sent to the wrong place can delay crediting and create avoidable default escalation.

For more background on how mortgages and probate interact, see successor in interest issues and foreclosure after a homeowner dies in North Carolina.

Conclusion

In North Carolina, a servicer generally must properly handle and explain the disposition of payments on covered home loans, but payment refusals commonly happen after a death because the servicer wants proof of who has legal authority for the estate and what amount is required to cure. If a power-of-sale foreclosure is pending, the foreclosure can be stopped by paying or tendering the secured obligation and required foreclosure expenses before the sale becomes final. The most practical next step is to open the estate and obtain letters for a personal representative so that a written cure/payoff statement can be requested and paid promptly.

Talk to a Probate Attorney

If a family member died owning a mortgaged home and the servicer is refusing payments or moving toward foreclosure, a probate attorney can help clarify who has authority to act, what documents the servicer needs, and what timelines apply in North Carolina. 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.

Category: Probate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.