North Carolina

North Carolina Foreclosure Laws

Expected Timeline: Two to four months

Security Instrument: Mortgage or Deed of Trust. Deed of trust most common.
Type of Process: Judicial or nonjudicial. Nonjudicial foreclosure are most common.
Protections for Servicemembers: None.
Time to Respond: Notice of default must be given to homeowners thirty days before notice of hearing. Notice of hearing must be given at least ten days before hearing. Twenty day notice of sale must be given if sale is posted and published, or else ten day notice of sale if homeowners are served by mail.
Reinstatement Period: None.
Protections for High-Cost Mortgages: North Carolina High Cost Mortgage Act, N.C. Gen. Stat. § 24-1.1E
Redemption Period: Redemption period is ten days after sheriff sale date.
Eviction Process: Former owners must be given a ten day notice to quit property. After this, new owner may go to court for writ of possession and summary eviction.
Deficiency Judgments: Not allowed in nonjudicial foreclosures.
Limits on Deficiency Judgments: May be limited by fair market value in judicial cases. No deficiency allowed in nonjudicial foreclosure of purchase money mortgage.
Cash Exempted in Bankruptcy: $5,500 for single person, $11,000 for married couple.
State Statutes: N.C. Gen. Stat. § 45-1.1 to 45-21.33

North Carolina foreclosure law allows lenders to pursue either Judicial or Non-Judicial Foreclosure procedures. The Judicial Foreclosure process is followed if the original loan documents do not contain a power of sale clause. The lender has to obtain an order to foreclose on the property by suing the borrower in court.

If the original loan documents contain a power of sale clause authorizing the lender to sell the property in the event of a default, the lender may use the Non-Judicial Foreclosure process. In this process, the clerk of the court must hold a hearing to determine whether a foreclosure may take place or not. All parties to the hearing must be served within ten (10) days of the hearing.

If the clerk of the court determines a foreclosure may take place, a notice of sale is mailed by first class mail to the borrower. The notice must also be published for two (2) consecutive weeks in a newspaper of general circulation in the county in which the property is located.

The last publication can not be less than ten (10) days before the date of sale. The notice must be posted on the door of the county courthouse no less than twenty (20) days before the scheduled sale date.

On the scheduled sale date, the sale will be conducted between 10:00 AM and 4:00 PM . For ten (10) days after the sale date, the auction will remain open, and bids may be filed with the clerk of the court.

North Carolina foreclosure law allows the sale date to be postponed by announcement at the time and place of the scheduled sale. The new time and place for the sale must be posted as a notice on the door of the courthouse.

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