Having to deal with a foreclosure can be extremely scary process. Hardship and unexpected situations arise that may cause us to miss a mortgage payment. We have good intentions but then something else happens and we miss another. Next thing you know we may find ourselves in a hole and don’t know a way out. If you find yourself facing foreclosure (or even threatened by the prospect of it), it is important to understand how the foreclosure process works in NC.
Understanding the Foreclosure Process in NC
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 NC… you’ll be much better equipped to navigate it well and come out on the other end in the best position possible.
Stages of the Foreclosure Process
Foreclosure works differently in different states around the country. In North Carolina, the foreclosure process is governed by N.C. General Statute Chapter 45 Article 2A.
- Lender or trustee files notice of hearing with the court to officially start the foreclosure process. A “foreclosure hearing” is held where the lender presents the information about the mortgage payment terms not being satisfied. If all the lender documents are in order the Court will usually set a date and time for the property to be sold at a foreclosure auction.
- At the auction the property is sold, and the proceeds are used to pay off the mortgage.
The foreclosure action typically doesn’t make its way to court until ~3 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.
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 Bright Buys Real Estate to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced invested 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 Fayetteville, please let us know. We can help!
We buy houses in Fayetteville, NC like yours from people who need to sell fast!
It is important to know that you can avoid foreclosure by paying off the mortgage up to the day of the actual auction. So even if the process has started, you still have time to avoid foreclosure, preserve your credit, and leave on your own terms by contacting Bright Shield Real Estate!