Processes Detailed In North Carolina Foreclosure Law

Under North Carolina foreclosure law, a lender can initiate a foreclosure when the borrower defaults on a mortgage or deed of trust. The judicial foreclosure process is used by the lender when there is no power of sale clause included in the mortgage agreement. A power of sale clause is an agreement that may be included in the mortgage that allows the lender to sell the property without initiating foreclosure proceedings through a court of law. In these cases, non-judicial foreclosure proceedings are used under rules outlined in the North Carolina foreclosure law “Power of Sale” guidelines.

The North Carolina foreclosure law “Power of Sale” guidelines state that a non-judicial power of sale foreclosure may be used after the borrower defaults on a mortgage including a power of sale clause to sell the property to pay off the balance of the loan. Before a power of sale foreclosure can begin, the lender and borrower must attend a preliminary hearing to ensure that there are no extenuating circumstances that should delay or halt the foreclosure proceedings. The power of sale clause included in the mortgage agreement will detail the time at which the sale will take place, the place where the sale will occur, and the terms of the sale under the mortgage agreement. The sale guidelines outlined in the power of sale clause must be strictly adhered to for the foreclosure to be valid under North Carolina foreclosure law.

When initiating a foreclosure under North Carolina foreclosure law, the process typically takes around 60 days. The process can be delayed or even negated by the borrower under a “right to redemption” clause in the mortgage agreement. A “right to redemption” clause states that the borrower can avoid foreclosure proceedings by paying off the amount that the mortgage is in default within a specified time period. Under North Carolina foreclosure law, if the borrower pays the default amount within a specified period, the mortgage will continue as if the mortgage was never in default. The guidelines for this procedure are also outlined in detail in the North Carolina foreclosure law.