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Paying off a mortgage is a major milestone for any homeowner. Owning a home outright can create financial opportunities and indicate a borrower’s creditworthiness. However, even after the final payment is made, consumers should remain vigilant in dealing with a mortgage lender. In North Carolina, specific legal requirements must be met by your mortgage lender to ensure a smooth transfer of ownership and accurate reporting. If you believe a mortgage lender is failing to report your mortgage as paid off or otherwise violating your rights, contact us today.
Most Americans lack the means to purchase a home outright. Therefore, they depend on financial institutions to provide long-term loans with affordable monthly payments. These institutions can be banks or specialized mortgage lenders. Some of the top mortgage lenders in the U.S. include United Wholesale Mortgage, Rocket Mortgage, and CrossCountry Mortgage. Additionally, banks like Navy Federal Credit Union, Chase, and Bank of America are also among the top 10 lenders. Whether your loan comes from a bank or a wholesale mortgage lender, they are subject to strict regulations to ensure fair and lawful practices.
Key federal and state laws regulate mortgage lenders’ activity, including:
Mortgage fraud and unfair lending practices can have severe consequences for homeowners. We represent clients harmed by the following consumer rights violations.
Mortgage lenders know that the lending process is filled with fees that consumers often pay sight unseen. However, some lenders have been accused of fraudulently charging fees or deliberately processing payments to impose late fees on their customers. Other issues include charging homebuyers for unnecessary inspection services, failing to use escrow to pay taxes, and charging borrowers late fees.
Insurance for future loan payments is often paid in advance as a single premium and then financed throughout the loan term. Consumers may not even understand or realize that they have purchased this insurance, and if the loan is paid off early, they may not be reimbursed.
Predatory lending often involves misleading tactics employed by mortgage companies or other financial institutions involved in real estate transactions. These schemes typically rely on deception, coercion, or exploiting the borrower’s ignorance about loan specifics. Such practices often incorporate harmful terms, including constant refinancing (also known as loan flipping), inflated charges, exorbitant interest rates, loans that exceed the borrower’s ability to repay, and outright fraudulent activities.
Mortgage lenders may intentionally or unintentionally provide inaccurate information to credit bureaus. This can include reporting false details about a borrower’s credit history, failing to update or correct errors on a borrower’s credit report, and misleadingly reporting the status of a loan, such as incorrectly indicating it is paid off or unpaid.
Chapters 45 and 47 of the North Carolina General Statutes require a lender to file appropriate documentation with the proper county register of deeds once a mortgage has been paid off. This step is important because it officially confirms the release of the lien on your property. According to these laws, the lender has 30 days after the mortgage is paid to complete this filing. This legal action is vital for homeowners to have clear and undisputed ownership of their property.
It is the lender’s burden to file within 30 days. If a lender fails to document a mortgage as paid off, several complications can arise:
If your lender fails to comply with the legal requirement to release your title after the mortgage is paid off, you may have grounds to file a lawsuit. North Carolina law explicitly gives you the right to pursue monetary damages of $1,000, attorneys’ fees, and other associated costs.
Maginnis Howard’s mortgage fraud class action attorneys have extensive experience handling complex lawsuits against banks, mortgage lenders, and mortgage servicing companies. We are dedicated to holding large corporations accountable for their misconduct. Contact us to learn about your rights or to receive a free case evaluation. Our North Carolina consumer protection attorneys can help assess your claim. We offer free consultations to all potential consumer law clients. To schedule a meeting with our legal team, visit our contact page. If we can assist with your case, we work on a contingency fee basis, so you won’t owe any attorneys’ fees unless we secure a settlement for you.
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