How Does A Foreclosure On a Home In NC Work?

Foreclosure is a term that no one wants to here. However, those who default on deeds of trusts or mortgages are all too familiar with the term. With little aide available from mortgage companies, foreclosure to many mean the beginning of the end of a long, tough road.

While each state law varies, North Carolina has simple foreclosure procedures. The process of foreclosure is either judicial or non-judicial. If a mortgage fails to include a "power of sale" clause in a loan agreement, the lender or mortgager of the property must petition the courts to take ownership of the property. Once obtained, the lender or mortgager of the property has full legal rights of the property and may auction it or list it for sale.

However, if a "power of sale" clause exists in a loan agreement, the lender or mortgager has a right to file for foreclosure on a property without a court order if the borrower defaults on the loan. The terms of default will also be specified in the loan agreement. If a deed or loan agreement specifies the time, place, and terms of the sale, state law usually allows the sale of the property. However, North Carolina requires a preliminary court hearing to take place before the sale of a foreclosure can occur.

Once the court allows the sale of foreclosure in North Carolina, a notice of sale must be mailed to the borrower within 20 days of the sale date. The notice of sale must be published in a newspaper or public forum at least once a week for two consecutive weeks, and the last ad must be advertised publicly within 10 days of sale of the property. Lastly, the notice of sale must be posted on the courthouse for 20 days before the sale describing the property, owners, mortgage holder, and details of the sale.

The sale of a foreclosure property must be held on courthouse grounds in the county in which the property is located. The time of the sale is restricted to 10:00 am to 4:00 pm. A postponement of sale can be allowed if it is announced at the time of the sale.

Postponement of a sale of a foreclosure property may occur if the borrower is trying to stop foreclosure. There are agencies that have stepped up to protect owners and consumers during hard economic times. To stop foreclosure, a specialized agency or individual can be obtained to negotiate terms of a mortgage loan with a lender.