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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.
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