Foreclosures For Sale Updated On: 03/12/10
North Carolina Foreclosure Laws
North Carolina Foreclosure Laws
The State of North Carolina is usually referred to as a title theory state wherein the property’s title stays as security until the payment of the loan on the property is taken care off in full. A deed of trust is the document that keeps the title of the property secure. The mortgage, in North Carolina, usually contains the same information as the deed of trust and functions in the same way in a judicial foreclosure.
A non-judicial foreclosure is the procedure primarily followed to foreclose on properties in North Carolina. No court action is needed in this method, but it does require a sale notice under a power of sale. To foreclose upon the property to take care the loan that has been defaulted upon, an attorney can use the power of sale clause which is usually included in the mortgage at time it is signed at inception; this is also referred to as a bond. This being a non-judicial method, very austere requirements for notices are in place, and the inclusion of the power of sale clause in the mortgage is necessary to follow this method of foreclosure.
Before the initiation of the foreclosure process, the attorney who is to conduct the foreclosure has to give the borrower a notice not later than twenty days prior to the sale, and the date of the notice of foreclosure sale must be published in a general circulation newspaper within the county where the property is situated for a minimum period of two weeks, once each week. The last of these publications has to be more than ten days before the date of the sale. The posting of the notice at the court-house should take place a minimum of twenty days before the date of the sale.
All the owners/occupants of the foreclosure property need to be served with the foreclosure notice as mentioned above, and must also be provided with the property’s legal description. The property is auctioned by the agent or the trustee and goes to the party that places the highest bid; this could be the lender too. The sale has to take place in between 10:00am and 04:00pm and cannot take place on Sundays, legal holidays, or days when the court-house remains closed. If a postponement notice is posted at the original venue of the sale, the postponement of the sale of foreclosure can be made by up-to ninety days.
Lenders in North Carolina can also opt for a judicial foreclosure which takes place through a court, and it is the court that announces the final verdict on the foreclosure. This procedure is referred to as foreclosure by action. The sheriff then sells the property at a sale that has been publicly notified. A complaint, along with a lis pendens, has to be filed in court. A legal document which is used to issue a notice to the public about the property that in foreclosure is called a lis pendens.
The legal documents are referred to as a mortgage, and in cases of commercial transactions, a security agreement. The security agreement is, on occasion, merged with the mortgage. A mortgage needs to be filed to authenticate the loan in question and its repayment terms, which are mentioned note.
It normally takes about 90 to 120 days to bring into effect a non-judicial foreclosure that goes uncontested; this depends on the time needed by different notices. If the action is contested in the court by the borrower, if the sale is sought to be postponed, or bankruptcy is filed for by the borrower, the process can be stalled.
A rather short statutory right of redemption exists in North Carolina. A borrower’s property that has been through the foreclosure process and been sold, can be redeemed by the borrower upon the complete payment of the balance on the loan in question and the costs within a period of ten days after the sale using the upset-bid procedure, wherein if the bid is increased by 5% by any of the bidders, the new bid would become the winning bid.
If the public-sale results in a foreclosure property selling for lesser than the amount on the loan secured by the mortgage in question, a deficiency judgment can be obtained. A deficiency judgment is referred under the North Carolina General Statutes, Chapter 45, Article 2B §45-21.36. A mortgagor holds the right use as defense, the property’s fair value as proof, for any deficiency that has the selling price as a basis.
Non-judicial foreclosures in North Carolina are governed by laws that are part of the North Carolina General Statutes, Chapter 45 (Mortgages and Deeds of Trust), Article 2, Article 2A as referred to in §45-4 to §45-21.38.
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