North Carolina Foreclosure Laws

North Carolina foreclosure laws allow both judicial and non-judicial foreclosure proceedings. However, judicial foreclosures are less common in this state. Most North Carolina foreclosures take between three and four months.

Pre-Foreclosure

In the event of problems with the title of a property, judicial foreclosures are usually preferred. In this process, the lender files a lawsuit. In this situation a court order is needed to get a foreclosure and the sale is overseen by the court.

Most North Carolina foreclosures are non-judicial. This is because most North Carolina mortgages and deeds of trust have a power of sale clause, which permits the lender to sell the property without resorting to a lawsuit in the event of a default. In this type of sale, a preliminary hearing must be held before the auction. At least ten days before this hearing date, the lender must deliver to the debtor in person or through the mail information about the hearing and the amount due. The preliminary hearing is overseen by the county clerk and the hearing decides whether the foreclosure will continue.

Notice of Auction

Some mortgages and deeds of trust have power of sale clauses that delineate the terms, place, and time the auction must take place. If this is the case, this is the guideline that must be followed when planning a foreclosure auction.

Generally, before a foreclosure auction can take place in North Carolina, a notice of auction must be published and posted. This notice must contain a description of the property, the time and place of the sale, and the names of everyone involved in the foreclosure proceeding. At least twenty days before the auction, the notice must be mailed to the debtor and any parties involved in the foreclosure. Once a week for two weeks, the notice must also be published in a local newspaper. The final notice to appear in the newspaper must be published ten days or less before the auction. The notice must also be posted at the courthouse at least twenty days before the foreclosure auction.

The foreclosure auction is held at the courthouse, between 10:00 a.m. and 4:00 p.m.. Once the sale has taken place, there is a ten day redemption period. During the period the debtor can redeem the property and anyone can enter an upset bid. An upset bid includes a deposit of at least 5% of the bid, submitted to the county clerk.