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North Carolina Foreclosure Law Summary

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North Carolina Foreclosure Laws Subject To Change

The North Carolina foreclosure summary below provides information on your state’s most common foreclosure rules. However, you should also know that your state’s foreclosure laws and procedures are subject to legislative, judicial, and local rule changes.

The information below is intended to provide you with a beginning point for understanding the intricacies and complexity of your state’s foreclosure law.

You will also need to consult with a local foreclosure defense lawyer to obtain a complete and current understanding of your state’s foreclosure laws and how they may apply to your specific legal and financial situation.

Quick Facts

Judicial Foreclosure Available: Yes

Non-Judicial Foreclosure Available: Yes

Primary Security InstrumentsDeed of Trust, Mortgage

TimelineTypically 60 days

Right of RedemptionYes

Deficiency Judgments AllowedVaries

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 the loan in the event of 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:

  1. 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.
  2. Said notice must name the borrowers, the lenders, provide a description of the property and state the date, time, and place of sale.
  3. The sale must be conducted at the courthouse in the county where the property is located between 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 ten (10) days after the foreclosure sale.
  4. 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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Reference Source: U. S. Foreclosure

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