Understanding the foreclosure process in NC is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in NC
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in NC works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (910) 302-8659 or through our contact page to have us walk you through the specific foreclosure process here locally in Fayetteville.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
North Carolina is a Power of Sale or Non-Judicial Foreclosure State, so we will walk through this process.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
From a timeline perspective, let’s say you miss a payment
- Day 1 – Preforeclosure Notice
- Day 15 – Notice of Default
- Day 25 Notice of Hearing
- Day 35-55 Pre-sale hearing takes place
- Day 55 – Auction Takes Place
- Day 75 – Auction
- Day 80 – Preliminary Sale Report
- Day 90 – Deadline for Filing Upset Bid & Any Upset Bids are Filed
- Day 115 – Sale Finalized
If you’re in a state of foreclosure, your window of time to sale is between Day 1 and Day 54, so you have about 2 months to sell your house in foreclosure in North Carolina.
If you’re actively working on selling your house, make your lender aware and you might be able to buy more time.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at TC Cummings Property to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Fayetteville, we can help you.
We buy houses in Fayetteville, NC like yours from people who need to sell fast.
Give us a call anytime (910) 302-8659 or
fill out the form on this website today! >>
Another Foreclosure Resource For Fayetteville, NC HomeOwners: