How do I enforce my rights under CFPB rules when a mortgage servicer won’t cooperate? – North Carolina

Short Answer

In North Carolina, you can enforce federal mortgage‑servicing rights by making formal written requests under the CFPB’s servicing rules and, if needed, filing a civil action in court. The Clerk of Superior Court who hears power‑of‑sale foreclosures cannot decide federal servicing disputes or award damages, so homeowners typically seek an injunction and bring claims in Superior Court (or federal court) under RESPA and state law to stop a sale and compel compliance.

Understanding the Problem

Your question is about how, in North Carolina, a homeowner can make a mortgage servicer follow federal servicing rules when the servicer will not cooperate. You own the home after a divorce, and the servicer has already acknowledged you as a confirmed successor in interest. You want to know what you can do—practically and legally—when the company refuses an assumption or loss mitigation even after a CFPB complaint.

Apply the Law

Under federal law, mortgage servicers must follow consumer‑protection rules that include responding to written error notices and information requests, and fairly evaluating timely, complete loss‑mitigation applications. In North Carolina, foreclosures by power of sale are heard by the Clerk of Superior Court on limited issues; broader servicing disputes and requests for damages or injunctions belong in a separate civil action in Superior Court (or federal District Court). If a foreclosure is pending, key federal timelines apply, including the rule that a complete loss‑mitigation application submitted far enough before a scheduled sale triggers evaluation duties and restricts moving forward with the sale while the application is pending.

Key Requirements

• Confirm successor status: Get and keep written confirmation that you are a confirmed successor in interest so the servicer must communicate with you and treat you as a borrower for key servicing rights.
• Use written servicing letters: Send a Notice of Error or Request for Information to the servicer’s designated address; the servicer must acknowledge within about five business days and provide a substantive response within required timeframes (often 30 business days, with a limited extension if they notify you).
• Submit a complete loss‑mitigation application: Send a complete package well before any scheduled sale (aim for at least 37 days before the sale) to trigger evaluation duties and anti‑dual‑tracking protections.
• Appeal denials when available: If you receive a loss‑mitigation denial after a timely, complete application, file an appeal within the short window the rules allow (often 14 days when your complete package was submitted 90+ days before a sale).
• Enforce in court if needed: If the servicer refuses to comply, file a civil action for injunctive relief and damages under RESPA and related law; seek a temporary restraining order/preliminary injunction to pause a sale.
• Know the forum limits: The Clerk of Superior Court at a foreclosure hearing cannot decide RESPA/TILA issues or award damages; those claims belong in Superior Court (or federal court).

What the Statutes Say

• North Carolina Gen. Stat. § 45-21.16 (Power‑of‑sale foreclosure hearing) – Sets the Clerk’s limited foreclosure hearing issues and notice requirements.
• North Carolina Gen. Stat. § 75-1.1 (Unfair and deceptive trade practices) – Allows civil claims for unfair or deceptive acts in commerce.
• 12 U.S.C. § 2605 (RESPA servicing) – Provides duties to respond to written requests and a private right of action for violations.
• 12 C.F.R. § 1024.41 (Loss‑mitigation procedures) – Requires evaluation of timely, complete applications and restricts dual tracking.

Analysis

Apply the Rule to the Facts: You already have written recognition as a confirmed successor in interest, so the servicer must honor key servicing rights, including loss‑mitigation review and responses to written error or information requests. If the servicer refuses assumption or loss mitigation, send formal written notices to its designated address to trigger federal response deadlines, and submit a complete loss‑mitigation package at least 37 days before any sale to stop dual tracking. If stonewalled, file a civil action in North Carolina Superior Court (or federal court) seeking an injunction and damages under RESPA and, if warranted, North Carolina’s unfair‑trade‑practice law.

Process & Timing

1. Who files: Homeowner/successor in interest. Where: For enforcement, North Carolina Superior Court in the county where the property is located (or federal District Court). For foreclosure, the servicer proceeds before the Clerk of Superior Court. What: Send a written Notice of Error/Request for Information to the servicer’s designated address and a complete loss‑mitigation application; if noncompliance continues, file a verified complaint with a motion for temporary restraining order/preliminary injunction. When: Mail servicing letters immediately; submit a complete loss‑mitigation application at least 37 days before any scheduled sale; appeal any denial within the stated window (often 14 days if eligible).
2. After filing in court: Ask the judge for a TRO/preliminary injunction to pause any sale while the case proceeds. Expect the court to set a prompt hearing; schedules vary by county.
3. Final step: Court order compelling compliance and/or awarding damages if violations are proven; resolution may also include a negotiated assumption or loss‑mitigation outcome consistent with investor guidelines.

Exceptions & Pitfalls

• Wrong address = no deadlines: Servicers often designate a specific address for error notices/info requests; use it, or federal response clocks may not start.
• Assumption vs. due‑on‑sale: Transfers by divorce generally fall under federal due‑on‑sale exceptions, but investor guidelines can still drive assumption approval; focus court relief on servicing violations and fair evaluation duties.
• Clerk limits: The Clerk of Superior Court at a foreclosure hearing cannot award damages or decide broader servicing disputes—seek an injunction and bring those claims in Superior Court (or federal court).
• Completeness matters: An incomplete loss‑mitigation package may not trigger protections; respond quickly to any servicer requests for documents.
• Timing traps: Appeal windows on denials and the 37‑day pre‑sale threshold are tight; missing them weakens your position to stop a sale.

Talk to a Real Estate Attorney

If you’re dealing with a North Carolina servicer that won’t honor CFPB servicing rules, 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.