A mortgage company may refuse payment if the lender has begun the foreclosure process. This is usually because the mortgage company is attempting to collect the full amount that is owed in arrears.
If a mortgage lender denies a mortgage payment, the company will usually send a letter to explain why. Usually, mortgage payments are denied by the lender because the borrower is already in arrears, sometimes up to two or three months behind. When mortgage lenders start declining payments, it is because they want all of the arrears made current before payments are accepted again. Any notifications sent to borrowers regarding declined payments should include how much is owed in arrears.