North Carolina State Foreclosure Law

Which law provision governs foreclosure in North Carolina?

You can find about this in North Carolina General Statutes, Chapter 45 (Mortgages and Deeds of Trust), Article 2, Article 2A as referenced in §45-4 to §45-21.38

What happens during Judicial Foreclosure in North Carolina?

It involves filing a law suite to obtain a court order. This is done when no power of sale is present in mortgage/deed. Once foreclosure is declared, property is auctioned off to highest bidder.

What happens during Non-Judicial Foreclosure in North Carolina?

Non-judicial foreclosure is conducted only when power of sale clause exists in deed of trust/mortgage. This clause allows borrower pre-authorizes the sale of property to pay off the balance loan in the incidence of their default. In such cases power is given to lender to sell the property by himself or his representative who generally referred as trustee. Guidelines for such procedure are mentioned under “Guidelines for power of sale foreclosure”.

Guidelines for power of sale foreclosure

If the deed of trust/mortgage contains a power of sale clause with specified time, place and terms of sale, then it should be followed. But in North Carolina, a preliminary hearing needs to be held before the power of foreclosure takes place.

The clerk of the county determines whether a foreclosure should take place or not, after the release of preliminary notices. If clerk issues foreclosure notice, the process is done as follows:

A notice should have the names of borrower, the lenders, description of the property, date/time/place of the sale. The notice should be mailed to the borrower 20 days before the sale by first class mail. It should be published in local newspaper for two consecutive weeks in local newspaper and second ad should appear 10 days before the sale. Also notice should be posted on court door, 20 days before the sale. The sale is conducted between 10 a.m. to 4 p.m. Upset bids may be filed with the court clerk for a period of ten (10) days after the foreclosure sale. Lenders can obtain deficiency judgments and the borrower gets right of redemption.

This is legal information; it should not be treated as legal advice.