North Carolina Foreclosure Laws

Under North Carolina foreclosure laws, a foreclosure can be administered either by judicial or non-judicial means. Delays in the process are expected since this would likely to happen if the borrower challenges the lawsuit. Foreclosure timeline would depend on the issuance of the different mandatory notices. Usually, a typical foreclosure would last for 90 to 120 days. The major security instruments used are Mortgage and Deed of Trust.

Judicial And Non-Judicial Foreclosure Information

A Power of Sale is a provision in the mortgage agreement that when signed by a borrower, authorizes the lender to pursue a foreclosure in the event that the borrower fails to meet the terms in the contract. Such breach of contract happens when the borrower defaults on payments. Borrowers who signed Power of Sale in the mortgage agreement are aware of the consequence if they fail to settle their debt.

In a North Carolina foreclosure, a judicial procedure takes place when the loan document does not contain a Power of Sale clause. When a lender decides to foreclose a property due to payment default issues, the person needs to file a lawsuit or lis pendens against the defaulted borrower in court. The court has the final judgment on the foreclosure. The lis pendens also services as a public notice which states that there is an impending foreclosure on a property in question. Also, an in-court foreclosure applies when the title deed to the property has problems or issues.

For loan documents which contain Power of Sale clause, a non-judicial process is used. With this type of foreclosure, a court action is not required since a Power of Sale empowers the lender to initiate a foreclosure to satisfy the borrower’s defaulted loans.

Foreclosure laws in North Carolina allows lenders to obtain deficiency judgment. When a property is sold for less than the amount of loan, a lender can file for deficiency judgment. When deficiency is granted, this means that the borrower owes the lender for the difference between amount of the property sold for at auction and the amount of the original loan.

Statutory right of redemption is allowed wherein a person whose property has been foreclosed can still reclaim the said property. In order to do so, the homeowner should pay off the total amount owed plus applicable costs or interest. However, homeowners are given only 10 days to redeem a property.

The foreclosure sale is conducted like a public auction and held at the county courthouse.

Notice Of Sale North Carolina

Under North Carolina foreclosure laws, a Notice of Sale is required and should be published in a local newspaper for at least 2 weeks prior to the public auction. Also, the Notice should be posted at the property in foreclosure and at the county courthouse. A copy of the Notice should be received by the homeowner at least 20 days before the foreclosure auction.