North Carolina
Foreclosure Law
Summary
Quick
Facts
-
Judicial Foreclosure Available:
Yes
-
Non-Judicial Foreclosure
Available: Yes
- Primary
Security Instruments: Deed of
Trust, Mortgage
-
Timeline: Typically 60
days
- Right
of Redemption:
Yes
-
Deficiency Judgments Allowed:
Varies
In North
Carolina, lenders may foreclose
on deeds of trusts or mortgages
in default using either a
judicial or non-judicial
foreclosure process.
Judicial
Foreclosure
The judicial
process of foreclosure, which
involves filing a lawsuit to
obtain a court order to
foreclose, is used when no power
of sale is present in the
mortgage or deed of trust.
Generally, after the court
declares a foreclosure, your home
will be auctioned off to the
highest bidder.
Non-Judicial
Foreclosure
The
non-judicial process of
foreclosure is used when a power
of sale clause exists in a
mortgage or deed of trust. A
"power of sale" clause is the
clause in a deed of trust or
mortgage, in which the borrower
pre-authorizes the sale of
property to pay off the balance
on a loan in the event of the
their default. In deeds of trust
or mortgages where a power of
sale exists, the power given to
the lender to sell the property
may be executed by the lender or
their representative, typically
referred to as the trustee.
Regulations for this type of
foreclosure process are outlined
below in the "Power of Sale
Foreclosure
Guidelines".
Power of
Sale Foreclosure
Guidelines
If the deed of
trust or mortgage contains a
power of sale clause and
specifies the time, place and
terms of sale, then the specified
procedure must be followed.
However, in North Carolina, a
preliminary hearing must be held
before a power of sale
foreclosure can take
place.
After the
preliminary notices have been
issued, the clerk of the court
will conduct a hearing to
determine whether or not a
foreclosure sale may take place.
If and when the clerk issues a
notice of sale, the foreclosure
may proceed as
follows:
- A notice of
sale must be: 1) mailed first
class mail to the borrower at
least twenty (20) days before
the sale; 2) published in a
newspaper of general
circulation in the county where
the property is located once a
week for two (2) successive
weeks, with the last ad being
published not less than ten
(10) days before the sale; and
3) posted on the courthouse
door for twenty (20) days prior
to the foreclosure sale.
- Said notice
must name the borrowers, the
lenders, provide a description
of the property and state the
date, time and place of
sale.
- The sale
must be conducted at the
courthouse in the county where
the property is located between
the hours of 10:00 am and 4:00
pm. The property will be sold
to the highest bidder. Upset
bids may be filed with the
court clerk for a period of ten
(10) days after the foreclosure
sale.
- The sale may
be postponed by announcing the
need to postpone at the time
and place the regular sale
would have taken place. A
notice of the postponement,
stating the new date and time
the foreclosure sale will be
held, must be posted on the
courthouse door.
Lenders may
pursue a deficiency judgment and
borrowers retain the right to
redemption.
More information on North
Carolina foreclosure
laws.
DISCLAIMER
