In North Carolina both out-of-court and court foreclosures occur. Out-of-court foreclosures are the most common.

Out-of-court foreclosures occur when a clause empowering the lender to sell the mortgaged property, in the event of a default by the borrower, is included in the mortgage deed. The foreclosure sale shall be held in the same county where the property is situated.

The mortgagee or trustee shall file a notice of hearing with the clerk of the court. After filing the notice of hearing, the lender shall serve the borrower with the notice of hearing within a period not less than 10 days from the date of hearing. The lender shall also communicate to the borrower the entire amount due, along with necessary costs and expenses.

After the notice of hearing is properly served, the clerk of the court conducts the hearing and decides whether the sale of the property by foreclosure he held or not.

Typically, the foreclosure timeline is three to four months, approximately.

If the deed of mortgage mentions the period, place and other terms of sale, such terms and procedures agreed by the lender and borrower in the deed of mortgage is to be followed.

The lender shall issue the notice of sale to the concerned parties, including the borrower. The notice shall contain the legal address of the property, the prescribed date and time of sale and the location of sale. The auction sale notice shall be served not less than 20 days from the date of the intended sale by the lender.

The lender shall also publish, in the county newspaper, the notice of sale, containing the details as served, for 2 consecutive weeks and the last date of the publication shall be less than 10 days from the date of the intended sale. The lender shall also post a copy of the notice of sale at the county courthouse within a period not less than 20 days from the date of the sale.

Contents of the notice, manner of serving to the concerned parties and period of service of the notice shall be as per the State's guidelines.

At the courthouse, the sale is conducted between 10 a.m. and 4 p.m. and the property is sold to the highest bidder. The highest bidder has to remit 5 percent of the value of the bid immediately. If the highest bidder fails to remit the sum, the seller can immediately re-offer the property for sale to another bidder. If the sale on the designated date is postponed, then the notice of the postponement is to be put up at the courthouse.

In the State of North Carolina, the borrower has got the right of redemption of the property by repaying all dues to the lender within 10 days of the completion of the sale. Both, the lender and the borrower, can also create and upset bid by remitting a 5 percent of the proposed bid to the county clerk.

If you need more information about North Carolina foreclosure laws, you should contact a foreclosure lawyer, or contact us so we can recommend one for you.