Foreclosure is a process that is initiated by lender in North Carolina when a borrower who has availed a mortgage loan on his property is not able to repay his obligations. If the homeowner gets behind in his EMI’s or misses them, the lender is well within his rights to start foreclosure proceedings. Foreclosure is intended to get the property back in the possession of the lender. The lender can sell off the property later on to recover its money paid for the purchase of the property.
It is non judicial in North Carolina
Through foreclosure, the homeowner loses his ownership rights and gets evicted from his own house. In North Carolina, foreclosure is not a judicial process. However, there is one step in this process where a hearing before the County Clerk just before the sale of the property.
Notices to the defaulter
In North Carolina, a lender has to issue 4 types of notices to the borrower before foreclosure proceedings can be initiated.
Pre foreclosure notice – This notice is sent by the lender at least 45 days prior to start of the foreclosure proceedings. The borrower is notified of the outstanding amount and the steps he can take to avoid foreclosure.
Notice of default – This notice is served to the borrower at least 30 days prior to foreclosure proceedings.
Notice of hearing- This notice is sent through the office of the County Clerk at least 10 days before the start of foreclosure proceedings. It is the prerogative of the County Clerk to postpone the foreclosure proceedings by another 60 days if he feels that the lender and the borrower can still resolve the matter amicably.
Notice of sale– This notice needs to be served at least 20 days prior to starting the sale procedure of the foreclosed property. The foreclosing party needs to post this notice in a public place and publish it in a local newspaper for two consecutive weeks before the sale.
Reinstating the mortgage
In North Carolina, there is a provision where a borrower can reinstate the mortgage by paying his missed or delayed payments in a bid to stop foreclosure proceedings. However, for reinstating the mortgage, it is necessary to have a clause to this effect in the mortgage agreement between the lender and the borrower.
At foreclosure hearing that takes place in County courthouse, the lender’s attorney presents facts and gives arguments against the borrower. If the court accepts his arguments, the date for a foreclosure sale is set and the proceedings begin.
At the foreclosure sale, the property is either sold to the buyer making the highest bid or goes back to the lender and becomes known as REO.
If the former owner of the house does not leave even after foreclosure sale, the buyer needs to serve a 10 day notice to him to leave the house. If he does not leave after this period, the new owner can go to the County Clerk and get an order for possession.
If you are in foreclosure and need help navigating the process, fill out our simple form and we will be happy to help you in this hard situation.