In Court or Out of Court
There are two types of home mortgage foreclosures in North Carolina. A judicial mortgage foreclosure in North Carolina requires a lender to begin a lawsuit and get a court order allowing it to foreclose on your home. A non-judicial foreclosure, however, essentially just requires a lender to provide you with notice before proceeding.
For a judicial foreclosure in North Carolina, you can expect to receive notice of the lender's intent to proceed with a foreclosure. According to the official website of the State of North Carolina, lenders are required to provide borrowers with 45 days of notice before they proceed with foreclosure. In that time period, you are also supposed to receive a document from the state that gives you a toll-free number to call for help with saving your home. After this default-notice period has passed, the lender will go into court and begin a foreclosure lawsuit, and you will receive a notice of the court date set for the lawsuit. If the lender wins the lawsuit, and the court grants the foreclosure, the lender will sell your home at auction.
Power of Sale Clauses
Some mortgages have power of sale clauses that allow lenders to proceed with foreclosures without obtaining court orders. To do this, the lender must first mail a notice of sale to the borrower 20 days before the date of the sale. Next, the borrower must publish the notice of sale in a general-circulation newspaper for two consecutive weeks. The final newspaper listing has to be posted at least 10 days before the date of the sale.
The lender must also post the sale information on the courthouse door, where it must remain for an entire 20 days before the auction. The sale notice must include the names of the borrowers, the lending organization, details about the property and the place where the auction will occur. The auction of a home takes place at the county courthouse on the date specified, between 10 a.m. and 4 p.m., with the home going to the highest bidder.
Before a mortgage foreclosure has taken place in North Carolina, borrowers have an opportunity to stop the proceedings. For example, they may arrange to refinance their mortgages, make satisfactory payment arrangements or come up with the entire overdue amount. In some cases, a borrower may attempt to sell his property or arrange for a deed in lieu of foreclosure, which involves signing the home deed over to the lender.