{"data":{"id":"us-nc/n.c.-gen.-stat.-53-244.111","jurisdiction":"us-nc","citation":"N.C. Gen. Stat. § 53-244.111","heading":"Prohibited acts.","body":"In addition to the activities prohibited under other provisions of this Article, it is unlawful for any person in the course of any residential mortgage loan transaction to do any of the following:\n(1)\tTo misrepresent or conceal the material facts or make false promises likely to influence, persuade, or induce an applicant for a residential mortgage loan or a mortgagor to take a residential mortgage loan, or to pursue a course of misrepresentation through agents or otherwise.\n(2)\tTo improperly refuse to issue a satisfaction of a residential mortgage loan.\n(3)\tTo fail to account for or to deliver to any person any funds, documents, or other thing of value obtained in connection with a residential mortgage loan, including money provided by a borrower for a real estate appraisal or a credit report, that the licensee is not entitled to retain under the circumstances.\n(4)\tTo pay, receive, or collect in whole or in part any commission, fee, or other compensation for brokering or servicing a residential mortgage loan in violation of this Article, including a residential mortgage loan brokered or serviced by any unlicensed person other than an exempt person.\n(5)\tTo charge or collect any fee or rate of interest or to make, broker, or service any residential mortgage loan with terms or conditions or in a manner contrary to Chapter 24, 45, or 54 of the General Statutes.\n(6)\tTo advertise residential mortgage loans, including rates, margins, discounts, points, fees, commissions, or other material information, including material limitations on residential mortgage loans, unless the person is able to make the residential mortgage loans available to a reasonable number of qualified applicants.\n(7)\tTo fail to disburse funds in accordance with a written commitment or agreement to make a residential mortgage loan.\n(8)\tTo engage in any transaction, practice, or course of business that is not in good faith or fair dealing or that constitutes a fraud upon any person in connection with the brokering, making, servicing, purchase, or sale of any residential mortgage loan.\n(9)\tTo fail to pay promptly when due reasonable fees to a licensed appraiser for appraisal services that meet both of the following:\na.\tRequested from the appraiser in writing by the mortgage broker, mortgage lender, or an employee thereof.\nb.\tPerformed by the appraiser in connection with the origination or closing of a residential mortgage loan for a customer, mortgage broker, or mortgage lender.\n(10)\tTo broker a residential mortgage loan that contains a prepayment penalty if the principal amount of the residential mortgage loan is one hundred fifty thousand dollars ($150,000) or less or if the residential mortgage loan is a rate spread home loan as defined in G.S. 24-1.1F.\n(11)\tTo improperly influence or attempt to improperly influence the development, reporting, result, or review of a real estate appraisal sought in connection with a residential mortgage loan. Nothing prohibits a licensee from asking the appraiser to do one or more of the following:\na.\tConsider additional appropriate property information.\nb.\tProvide further detail, substantiation, or explanation for the appraiser's value conclusion.\nc.\tCorrect errors in the appraisal report.\n(12)\tTo fail to comply with the mortgage loan servicing transfer, escrow account administration, or borrower inquiry response requirements imposed by sections 6 and 10 of RESPA, as periodically amended, and regulations adopted under it.\n(13)\tTo broker a rate spread adjustable rate mortgage loan without disclosing to the borrower the terms and costs associated with a fixed rate loan from the same mortgage lender at the lowest annual percentage rate for which the borrower qualifies.\n(14)\tTo fail to comply with applicable State and federal laws related to mortgage lending or mortgage servicing.\n(15)\tTo engage in unfair, misleading, or deceptive advertising related to a solicitation for a residential mortgage loan.\n(16)\tIn connection with the brokering or making of a rate spread home loan as defined under G.S. 24-1.1F, no mortgage lender shall provide nor shall any mortgage broker receive any compensation that changes based on the terms of the loan. This subdivision does not prohibit compensation based on the principal balance of the loan.\n(17)\tTo fail to comply with the mortgage servicer's obligations under Article 10 of Chapter 45 of the General Statutes.\n(18)\tTo fail to provide written notice to a borrower upon taking action to place hazard, homeowner's, or flood insurance on the mortgaged property or to place the insurance when the person acting as a mortgage servicer knows or has reason to know that the insurance is in effect.\n(19)\tTo place hazard, homeowner's, or flood insurance on a mortgaged property for an amount that exceeds either the value of the insurable improvements or the last known coverage amount of insurance.\n(20)\tTo fail to provide to the borrower a refund of unearned premiums paid by a borrower or charged to the borrower for force-placed hazard, homeowner's, or flood insurance if the borrower provides reasonable proof that the borrower has obtained coverage such that the forced placement is no longer necessary and the property is insured. If the borrower provides reasonable proof, within 12 months of the placement, that no lapse in coverage occurred such that the forced placement was not necessary, the person acting as a mortgage servicer shall refund the entire premium.\n(21)\tTo refuse to reinstate a delinquent loan upon a tender of payment made timely under the contract that is sufficient in amount, based upon the last written statement received by the borrower, to pay all past due amounts, outstanding or overdue charges, and restore the loan to a nondelinquent status, but this reinstatement shall be available to a borrower no more than twice in any 24-month period.\n(22)\tTo fail to mail, at least 45 days before foreclosure, forfeiture, or repossession is initiated, a notice addressed to the borrower at the borrower's last known address with the following information:\na.\tAn itemization of all past due amounts causing the loan to be in default.\nb.\tAn itemization of any other charges that shall be paid in order to bring the loan current.\nc.\tA statement that the borrower may have options available other than foreclosure and that the borrower may discuss the options with the mortgage lender, the mortgage servicer, or a counselor approved by the U.S. Department of Housing and Urban Development (HUD).\nd.\tThe address, telephone number, and other contact information for the mortgage lender, the mortgage servicer, or the agent for either of them that is authorized to attempt to work with the borrower to avoid foreclosure.\ne.\tThe name, address, telephone number, and other contact information for one or more HUD-approved counseling agencies operating to assist borrowers in North Carolina to avoid foreclosure.\nf.\tThe address, telephone number, and other contact information for the State Home Foreclosure Prevention Project of the North Carolina Housing Finance Agency.\n(23)\tTo fail to make all payments from any escrow account held for the borrower for insurance, taxes, and other charges with respect to the property in a timely manner so as to ensure that no late penalties are assessed or other negative consequences result regardless of whether the loan is delinquent, unless there are not sufficient funds in the account to cover the payments and the mortgage servicer has a reasonable basis to believe that recovery of the funds will not be possible. (2009-374, s. 2; 2013-327, s. 11; 2014-115, s. 4; 2025-43, s. 1.)","path":["Chapter 53. Regulation of Financial Services.","Article 19B. The Secure and Fair Enforcement Mortgage Licensing Act.","Part 1. Application, Licensing, Examination, and Enforcement."],"source_url":"https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_53/GS_53-244.111.html","current_through":"S.L. 2026-30","vintage":"","retrieved_at":"2026-08-27T18:05:12Z","sha256":"800fc22449637e34b6be10df58579373b3cb691b756595a7f88dfd15a4ac608b","source_id":"us-nc","stale":false,"prev":"us-nc/n.c.-gen.-stat.-53-244.110","next":"us-nc/n.c.-gen.-stat.-53-244.112"},"notice":"GroundRules: Original legal text. Not legal advice."}