If you find yourself facing foreclosure (or even threatened by the prospect of it), it’s absolutely critical to understand how the foreclosure process works in North Carolina. But first, if this is you, take a breath. It will be ok.
Understanding the Foreclosure Process in North Carolina
What is foreclosure anyway?
Legally, foreclosure is the official process by which a mortgage lender attempts to take back real estate property (a home) securing a loan (a mortgage) – usually after a borrower (or a homeowner) stops making payments.
By no means is foreclosure fun, but it’s not the end of the world.
By knowing how foreclosure works in North Carolina… you’ll be better prepared for the road to come and you’ll end up on the other side in the best position possible.
Stages of the Foreclosure Process
Every state has its own foreclosure process, but the overall concept is understandable.
There are generally two methods different states use to foreclose upon a property: judicial sale or power of sale.
Connect with us through our contact page or by calling us at 336-355-7580 to have us walk you through the specific foreclosure process here in Greensboro.
In either scenario, a foreclosure auction typically doesn’t make its way to court until 3-6 months of missed payments. Usually (but not always), a lender will send out several notices letting you know that you’re overdue or behind in your payment. While avoiding foreclosure AND keeping your home is the best scenario, it may not be possible with your situation. If you feel this is you, please let us help. We can buy your home fast, helping you avoid foreclosure and saving your credit score, and helping your future financial stability.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll receive a letter from the court demanding payment.
- You’ll have 30 days to bring payment to court to avoid foreclosure (sometimes that can be extended).
- If you don’t pay after this period, a judgement will be entered and the lender can request the sale of your property – generally through an auction.
- Once the property is sold, the local sheriff serves an eviction notices and you must vacate the property.
Under Power of Sale (Non-Judicial) Foreclosure:
- The lender serves you with a notice demanding payment, and the courts are not required – although there may be some level of judicial review.
- After the established waiting period has gone by, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trusteed can then sell your property to the lender at a public auction (notice must be given).
So, What Happens After A Foreclosure Auction?
After a foreclosure is complete, the amount of the loan is paid off with the proceeds from the sale of the property.
Sometimes, if the sale of the property isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower. A deficiency judgement is where the bank gets a judgement against you, the borrower, for the remaining funds owned to the bank.
Some states limit the amount owed in a deficiency judgement to the fair value of the property at the time of the sale, while other states will allow the full loan amount to be asssesed.
Here’s a great resource that lists the state by state laws when it comes to deficiency judgements.
Generally, it’s best to try to avoid a foreclosure auction. Instead, call up the bank to negotiate, or work with a local, reputable real estate firm like us at Lehti Homes 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 the banks – or even eliminate the prospect of a foreclosure, even if your home is worth less than you owe.
If you’re currently facing foreclosure and need to sell a property near Greensboro, please let us know. We can help!
We buy houses in Greensboro, North Carolina like yours from people who need to sell fast!