Summary of North Carolina's Foreclosure Laws

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If you are facing foreclosure in North Carolina, it’s important to understand some of the basics, including:

  • the most common type of foreclosure procedure (judicial v. nonjudicial) used in North Carolina
  • how much time you have to respond
  • your rights and protections in the process, and
  • what happens afterwards (for example, whether you’ll be liable for a deficiency judgment).

Below we have outlined some of the most important features of North Carolina foreclosure law. Keep in mind that this is just a summary; we’ve included statute citations so you can get more details from the laws themselves. And be sure to check out Nolo’s extensive Foreclosure section, where you can find information about all aspects of foreclosure, definitions of foreclosure terms (like redemption and reinstatement), and options to avoid foreclosure.

Topic

State Rule

Most common type of foreclosure process

Nonjudicial under power of sale in deed of trust. Property cannot be sold until the court clerk holds a hearing, reviews foreclosing party’s paperwork, and certifies sale.

Time to respond

A notice of hearing must be filed with the court to initiate the foreclosure. Foreclosing party must send borrower a notice including amount needed to cure the default and resources that are available to avoid foreclosure at least 45 days before filing a notice of hearing, as well as a notice of default 30 days before the date of the notice of hearing. After the notice of hearing is filed, it must be served to the borrower not less than ten days before the hearing (20 days if served by posting). The hearing may be continued (postponed) for up to 60 days if loss mitigation efforts may help avoid foreclosure. If foreclosure approved at hearing, borrower must be mailed a notice of sale at least 20 days before the sale, which must also be published in a newspaper and posted publicly.

Reinstatement of loan before sale

Not available (except as permitted by the terms of the mortgage or deed of trust)

Redemption after sale

Available within ten days after the sale

Special protections for foreclosures involving high-cost mortgages

None

Special state protections for service members

Nonjudicial foreclosure prohibited during or within 90 days after a borrower’s period of military service if the mortgage or deed of trust originated before the period of military service. N.C. Gen. Stat. §§ 45-21.12A, 45-21.16

Deficiency judgments

No deficiency judgment in nonjudicial foreclosures for purchase money (seller financed) mortgages and deeds of trust. Foreclosing party may also be barred from seeking a deficiency judgment if the mortgage is nontraditional (for example, pick-a-payment or option ARM loans) or is a rate spread home loan (where the annual percentage rate exceeds a certain threshold), and the mortgage secures borrower’s principal residence.

Cash exempted in bankruptcy

$5,500 for one person, $11,000 for a married couple

Notice to leave after house is sold

New owner must give former owner a 10-day notice to quit (leave) before getting an order for possession from the court clerk

Foreclosure statutes

N.C. Gen. Stat. §§ 45-21.1 to 45-21.33, 45-100 to 47-107

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