Jan12026
Real Estate Q&A Series

What options do I have if the mortgage company kept adding fees and the payoff amount grew while I was trying to work things out? – North Carolina

Short Answer

In North Carolina, a homeowner facing a growing payoff due to added servicing fees may have options to (1) demand a detailed payoff statement, (2) dispute fees that were not timely assessed or clearly explained, and (3) raise servicing and accounting problems as defenses or claims in the foreclosure case. If the loan is a “home loan” under North Carolina law, certain fee and notice rules apply, and some late-assessed or poorly disclosed fees can be treated as waived. With a foreclosure sale date approaching, the most important step is to act quickly in the foreclosure file and in writing with the servicer.

Understanding the Problem

In North Carolina, what options exist when a mortgage servicer keeps adding fees and the payoff amount increases while the property owner is trying to negotiate, request information, or resolve disputes, and a foreclosure sale is now scheduled. The key decision point is whether the added fees and payoff calculations follow the rules that apply to mortgage servicing and payoff statements, and whether those issues can be used to challenge the amount claimed due or to seek relief in the foreclosure process. This question commonly comes up when a family member inherits a home, title changes hands, but the loan account remains in the deceased borrower’s name and communication with the servicer becomes difficult as default and foreclosure move forward.

Apply the Law

North Carolina law gives borrowers and certain other “entitled persons” tools to force transparency about the payoff amount and to challenge improper servicing fees. A secured creditor generally must provide a payoff statement within a set time after a proper request, and the payoff statement must itemize fees and provide information needed to calculate the payoff as of a specified date. Separately, for covered “home loans,” North Carolina imposes timing and disclosure requirements on servicers when they assess fees; if those requirements are not met, the statute treats the fee as waived. When a foreclosure is pending, these issues often get raised with the substitute trustee and at the foreclosure hearing in front of the clerk of superior court.

Key Requirements

  • Clear payoff information on request: A proper request can require the secured creditor to send a payoff statement that breaks down the payoff amount by fee type and provides per diem interest and payment instructions.
  • Timely assessment and clear disclosure of servicing fees (for covered home loans): For many “home loans,” the servicer must assess fees within a set window and provide a clear written explanation soon after; missing those steps can mean the fee is treated as waived.
  • Written notice before suing for damages under the home-loan servicing article: If pursuing damages for a servicing violation under the North Carolina home-loan servicing statute, the borrower (or representative) generally must send a written error/dispute notice and wait before filing a damages lawsuit, though defenses and requests to stop a case can still be raised in court.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, title is in the current owner’s name, but the loan account remains in the deceased parent’s name, and the servicer allegedly added escalating fees over years while disputes continued and foreclosure is now scheduled. North Carolina’s payoff-statement law supports a written demand for an itemized payoff that shows each fee and the per diem interest so the payoff can be checked. If the loan is a covered “home loan,” North Carolina’s servicing-fee rules may also support disputing fees that were not assessed within the required timeframe or were not clearly explained in a timely written statement, and those issues can matter in the foreclosure file as the sale date approaches.

Process & Timing

  1. Who files: The property owner (and, if needed, an authorized agent such as an attorney). Where: (a) With the secured creditor/servicer at the address designated on statements for disputes and payoff requests; and (b) in the pending foreclosure file before the Clerk of Superior Court in the county where the property is located. What: A written request for a payoff statement that includes a payoff date (no more than 30 days out) and identifies the loan and property; and a written dispute notice identifying claimed errors in fees and accounting. When: A creditor generally must send a compliant payoff statement within 10 days after an effective request under the payoff-statement statute.
  2. Build the record quickly: Compare the payoff statement’s itemized fees to the loan documents and the servicer’s prior statements. For covered home loans, check whether each fee was assessed within the statutory window and whether the servicer sent a clear written explanation soon after assessment; if not, the statute can treat the fee as waived.
  3. Use the foreclosure timeline: Raise payoff/fee disputes promptly with the substitute trustee and in the foreclosure proceeding. Depending on posture and timing, options may include requesting a continuance, asserting defenses at the clerk hearing, or filing a separate action seeking injunctive relief to stop a sale when legally justified.

Exceptions & Pitfalls

  • Not every mortgage is a “home loan” under the servicing-fee statute: Coverage can depend on the loan type and purpose. If the loan is not covered, the fee-waiver rule in the home-loan servicing statute may not apply, but payoff-statement rights and other defenses may still matter.
  • Payoff requests must be done the right way: The payoff-statement statute requires specific information (including a payoff date within 30 days). Informal phone calls often do not create the same obligations or paper trail as a compliant written request.
  • Notice before damages claims: For damages under the home-loan servicing remedies statute, a written notice of claimed errors generally must be sent at least 30 days before filing a damages lawsuit. That notice requirement does not eliminate the ability to raise defenses or seek to stop a foreclosure when time is short, but it can affect later claims for money damages.
  • Foreclosure fees can increase once a case starts: Attorney and trustee fees tied to a foreclosure can be charged, but they still must be assessed and disclosed in the manner required when the home-loan servicing statute applies.
  • Standing and communication after a death: When the borrower has died, servicers sometimes limit what they will discuss. Having recorded title helps, but it may still be necessary to provide documentation and/or use an authorized agent to obtain payoff and account information promptly.

Conclusion

In North Carolina, when a mortgage payoff grows due to added fees during a dispute, the main options are to demand a statutory payoff statement that itemizes every fee and to challenge fees that were not timely assessed or clearly disclosed when the home-loan servicing rules apply. These issues can also be raised in the foreclosure proceeding before the clerk of superior court, especially when a sale date is near. Next step: send a written payoff-statement request that complies with the statute to the servicer’s designated address immediately.

Talk to a Real Estate Attorney

If a foreclosure sale is approaching and the payoff amount keeps growing due to added fees, our firm has experienced attorneys who can help review the payoff, spot fee and notice issues, and explain options and timelines under North Carolina law. 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: Real Estate Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.