If you believe you may be subject to a foreclosure action in North Carolina, a good place to begin learning about the foreclosure process and your rights is to review your state's foreclosure statutes. Here you'll find instructions on how to access these statutes as well as a summary of the information found in the statutes.
Finding North Carolina's Foreclosure Laws
North Carolina's foreclosure laws can be found in North Carolina General Statutes (N.C. Gen. Stat.) Sections 45-21.1 through 45-21.38. To find these statutes online, take the following steps:
1. Begin at the North Carolina General Assembly website at www.ncga.state.nc.us.
2. On the right hand side of the screen, under "Shortcuts," click "General Statutes."
3. Under "Browse," click "NC Statutes Table of Contents."
4. Scroll down and click “Chapter 45 – Mortgages and Deeds of Trust.”
You should see a list of the articles and sections in Chapter 45. North Carolina foreclosure laws can be found in the sections in Articles 2A (Sales under Power of Sale), 2B (Injunctions; Deficiency Judgments), and 11 (Emergency Program to Reduce Home Foreclosures).
Summary of North Carolinas Foreclosure Laws
North Carolina’s foreclosure laws are lengthy and complex. Here are some of the important sections you should be aware of.
North Carolina permits lenders to foreclose on a home pursuant to a power of sale found in the mortgage or deed of trust, instead of bringing a lawsuit against the homeowner. However, all foreclosures must be certified by a court clerk prior to the foreclosure sale.
To initiate the foreclosure process, a lender must first file a notice of hearing with the court clerk. The homeowner is then entitled to contest the foreclosure at the hearing. N.C. Gen. Stat. § 45-21.16.
Lenders must provide four types of foreclosure notices to defaulting borrowers:
- Pre-foreclosure notice. Forty-five days prior to filing a notice of hearing, lenders are required to inform homeowners about resources that are available to avoid foreclosure. N.C. Gen. Stat. § 45-102. The Commissioner of Banks has the authority to delay the filing of a notice of hearing by 30 days if it believes foreclosure can be avoided with aid from the state’s foreclosure prevention programs. N.C. Gen. Stat. § 45-105.
- Notice of default. A notice of default must be delivered the defaulting borrowers 30 days prior to the delivery of the notice of hearing. N.C. Gen. Stat. § 45-21.16.
- Notice of hearing. The notice of hearing must be given ten days before the date of the foreclosure hearing with the court clerk. N.C. Gen. Stat. § 45-21.16. The clerk may extend the hearing date for 60 days if it appears that loss mitigation efforts may resolve the matter without a foreclosure sale. N.C. Gen. Stat. § 45-21.16C.
- Notice of sale. North Carolina requires lenders to provide notice of a pending foreclosure sale in three ways:
-Posting the notice of the foreclosure sale at a place designated by the court clerk at least 20 days prior to the sale date.
-Publishing the notice in a newspaper of general circulation once a week for two consecutive weeks prior to the sale. The final notice must be published within ten days of the sale.
-Mailing the notice to the homeowner 20 days prior to the date of sale. N.C. Gen. Stat. § 45-21.17.
Lenders cannot sue homeowners for a deficiency in nonjudicial foreclosures of purchase money mortgages. N.C. Gen Stat. § 45-21.38. Deficiency judgments are also prohibited for mortgages recorded prior to January 1, 2010, where the mortgage was foreclosed under a power of sale and the property securing the mortgage was the borrower’s primary residence at the time of the foreclosure sale; and for mortgages recorded on or after January 1, 2010, where the property securing the foreclosed mortgage was the borrower’s primary residence at the time of the foreclosure sale. N.C. Gen Stat. § 45-21.38A.
For a summary of your states’ law, see Anti-Deficiency Laws by State.
Special Protections for Servicemembers
North Carolina prohibits the initiation of nonjudicial foreclosures during or within 90 days after a borrower’s period of military service. N.C. Gen Stat. § 45-21.12A.