State Foreclosure Laws

Summary:

Judicial foreclosure: In the absence of a power of sale clause in the loan document that authorizes the lender to sell the property in the event of default, the lender must sue the borrower to obtain an order to foreclose.

Non judicial foreclosure requires that the clerk of the court hold a hearing to determine whether or not a foreclosure may take place. The notice of hearing shall be served upon all parties at least 10 days prior to the date of the hearing. If the clerk of the court finds that foreclosure may proceed, the process is as follows:

The notice of sale must be mailed by first class to the borrower, published weekly in a newspaper of general circulation in the subject county for two successive weeks, with the last publication date not less than 10 days before the date of sale, and posted on the courthouse door at least 20 days before the date of sale.

The sale will take place at the subject courthouse on the date designated between the hours of 10:00 AM and 4:00 PM. The auction shall remain open and bids may be filed with the clerk of the court for 10 days following the sale date.

The sale may be postponed by announcement of postponement at the time and place of the original sale. A notice of postponement stating the new date and time of sale must be posted on the courthouse door.

Foreclosure Legislation:

• 45-21.16A. Contents of notice of sale
  Law which regulates the information required on a notice of sale.
  
  
• 45-21.17. Posting and publishing notice of sale of real property
  Law which regulates the sale to be made public notice.
  
  
• 45-21.21 Postponement of sale
  Law which regulates who may postpone a sale.
  
  
• 45-21.23 Time of sale
  Law which regulates the sale time of when a sale can take place.
  
  
• 45-21.30.  Failure of bidder to make cash deposit or to comply with bid; resale
  Law which regulates the liability of purchaser at a sale.
  
  
• 45-21.36. Right of mortgagor to prove in deficiency suits reasonable value of property by way of defense
  Law which regulates the right of the foreclosed owner to file a judgment if property sold was for an unfair amount.
  
  
• Chapter 45 Mortgages and Deed of Trust Article 2 - Right to Foreclose or Sell under Power
  Laws which regulate the foreclosure process.
  
  
• Mortgage Lending Act
  Law which regulates the lending procedures.
  
  
• North Carolina State Statutes
  

• North Carolina: HB 1708, a measure that would end "subject to" transactions in the state, has been referred to a subcommittee of the Senate Judiciary Committee. NARHRI has already been in contact both the chairman of the committee and the subcommittee (see our letters online at www.narhri.org) and continues to work with the committee on the measure. Budget issues are currently at the top of the agenda for the Senate, so as of now the bill that would require an affirmative letter from lenders to permit investors to engage in subject to transactions is not scheduled for a hearing.
  
  
• NARHRI lobbyist Guy Rohling and Executive Director John Grant are closely monitoring developments in the state and working with lawmakers to prevent passage of this measure, or to significantly amend the bill. The legislature in North Carolina is not expected to adjourn until September, so there is still a significant amount of work yet to be done on behalf of investors. NARHRI also plans to implement our CARES Program in the state later this year as a way to improve the image of the industry and educate lawmakers about the benefits investors provide consumers and the economy.
  
  
• HOUSE BILL 313: Identifying Loan Originator on Deed of Trust
  
  
• HOUSE BILL 817: Residential Mortgage Fraud Act
  
  
• HOUSE BILL 947: NC Foreclosure / Landlord Tenant Laws
  
  
• HOUSE BILL 1374: Protect Homeowners / Reduce Foreclosure
  
  
• HOUSE BILL 1817: Protect Consumers – Covered Laws
  

• Foreclosure Forecast Article: Foreclosures Scams Leading to Bad Laws