Grasping how the foreclosure process works in NC is key to managing your own home foreclosure situation effectively.
Let’s take a moment to prepare…
Details relating to the Foreclosure Process in NC
What is foreclosure anyway?
Foreclosure is the way that banks and lenders reclaim a property when the owner fails to keep up with their loan payments. This usually happens after the borrower has not made payments for a while.
Going through a foreclosure can be tough. However, remember that it’s not the end of everything.
Understanding how foreclosure operates in NC gives you the tools to handle it effectively and emerge from the situation in the best possible way.
The Basic Stages of A Foreclosure
There are several key steps that are crucial in any foreclosure process.
Foreclosure can vary significantly from state to state across the nation.
The two main methods states use to foreclose on a property are: judicial sale and power of sale.
Feel free to reach out to us at 704-605-9520 or visit our contact page so we can guide you through the foreclosure process specific to Charlotte, NC.
In both cases, the foreclosure process usually doesn’t reach the court until 3-6 months after payments have been missed. Typically (though not always), lenders will issue multiple notices indicating that your payments are overdue.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
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).
Everyone who cares about the property needs to be informed during both kinds of foreclosure.
For instance, any banks or contractors that have claims against a foreclosed property can get paid from the money made at an auction.
What Happens After A Foreclosure Auction?
When a foreclosure happens, the loan is cleared with the money made from selling the property.
If the property doesn’t sell for enough at the auction to cover the loan, the bank may issue a deficiency judgment against the borrower.
A deficiency judgment means that the bank has a right to claim the remaining money you owe after the foreclosure sale.
Some states limit how much can be claimed in a deficiency judgment to the property’s fair value at the time of sale, while others allow the bank to pursue the total loan amount.
You can find helpful information about deficiency judgment laws for each state, since these rules are not the same everywhere.
It’s usually a good idea to steer clear of a foreclosure auction. You should reach out to the bank or work with a trustworthy real estate company like Neighborhood Property Group NC to help you negotiate a lower amount owed to avoid a foreclosure.
Skilled investors can assist you by talking directly with banks to reduce your debt in a sale—or even wipe it out—regardless of whether your home’s value is less than what you owe.
If you need to sell a property near Charlotte, we are here to help.
We buy houses in Charlotte NC from those who need to sell quickly.
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