How foreclosure works in North Carolina

The notices you will receive in North Carolina, in order

1. 45-day pre-foreclosure notice

   Mailed by your servicer at least 45 days before the foreclosure is filed (home loans on a primary residence)

   It itemizes the past due amounts and other charges needed to bring the loan current, says you may have options other than foreclosure, and lists HUD-approved counselors and the State Home Foreclosure Prevention Project. Call the project at 1-888-442-8188 right away to be connected with a free counselor.

   N.C.G.S. § 45-102

2. Notice of hearing

   Filed with the clerk of superior court by the trustee; served on you at least 10 days before the hearing, or posted on the home at least 20 days before

   This starts the foreclosure case, which is filed as a special proceeding. It names the loan, the default, and the date, time and place of the hearing before the clerk. It must tell you that the trustee is neutral, that you can contest the evidence, and that free legal help may be available from Legal Aid of North Carolina.

   N.C.G.S. § 45-21.16(a) to (c)

3. Written statement of what the lender says you owe

   Mailed to you within 30 days of the date of the notice of hearing

   The notice of hearing must confirm that you were sent a detailed statement of the principal, interest, fees and costs being claimed, plus a daily interest figure. Compare it with your records. If something looks wrong, you can send your servicer a written request for an account statement and payment history.

   N.C.G.S. §§ 45-21.16(c)(5a), 45-93

4. Clerk's order authorizing the sale

   Entered by the clerk at or after the hearing

   The clerk signs it only after finding a valid debt held by the party foreclosing, a default, the right to foreclose, proper notice, the 45-day notice on a home loan, and no military service bar. You have 10 days to appeal it to a judge.

   N.C.G.S. § 45-21.16(d), (d1)

5. Notice of sale

   Posted at the courthouse and mailed to you at least 20 days before the sale; published in a newspaper once a week for 2 weeks

   It gives the date, hour and place of the sale and the terms, such as the bidder's deposit. For homes with fewer than 15 rental units it must also say that the buyer can get an order for possession from the clerk, and explain the tenant's right to end a lease.

   N.C.G.S. §§ 45-21.16A, 45-21.17

6. Notice of upset bid

   Mailed by the trustee after someone files a higher bid with the clerk

   After the auction, anyone can raise the bid within 10 days, and each new bid starts another 10 days. The trustee must mail notice of each upset bid to the record owner. Until the last period ends, paying the full debt and expenses still stops the foreclosure.

   N.C.G.S. §§ 45-21.27(e1), 45-21.20

7. Notice of a request for an order for possession

   From the buyer or trustee, at least 10 days before the clerk can issue the order

   Once the sale is final and paid for, the buyer can ask the clerk for an order for possession against anyone still living there. The sheriff carries it out and must first tell you the approximate time.

   N.C.G.S. §§ 45-21.29(k), 42-36.2

The legal steps in North Carolina

1. Missed payments and the 45-day pre-foreclosure notice

   After the federal 120-day wait, your servicer can start. For a home loan on your primary residence, North Carolina also requires the servicer to mail you a notice at least 45 days before it files. The notice lists what you owe to catch up, says you may have other options, and gives contact information for HUD-approved counselors and the State Home Foreclosure Prevention Project. Call 1-888-442-8188 when it arrives.

   N.C.G.S. §§ 45-102, 45-103

2. Notice of hearing is filed and served

   The trustee files a notice of hearing with the clerk of superior court and serves it on you at least 10 days before the hearing, or posts it on the home at least 20 days before if you cannot be served. The notice states the default, the date and place of the hearing, and that free legal help may be available from Legal Aid of North Carolina.

   N.C.G.S. § 45-21.16(a) to (c)

3. Hearing before the clerk of superior court

   The clerk can allow the sale only after finding a valid debt held by the party foreclosing, a default, the right to foreclose, proper notice, that the 45-day pre-foreclosure notice was sent on a home loan, and that military service rules do not bar the sale. If you live in the home, the clerk must ask what the servicer did to work things out and can continue the hearing up to 60 days if more time is likely to resolve it. You do not have to attend, but you can come and contest the evidence.

   N.C.G.S. §§ 45-21.16(d), 45-21.16C

4. Appeal within 10 days

   Either side can appeal the clerk's order to a district or superior court judge within 10 days. To stop the sale while the appeal is pending, you must post a bond, which for an owner-occupied home is set at 1 percent of the principal balance unless the clerk sets a different amount.

   N.C.G.S. § 45-21.16(d1)

5. Notice of sale and the trustee's sale

   The notice of sale is posted at the courthouse at least 20 days before the sale, published in a local newspaper once a week for 2 weeks, and mailed to you at least 20 days before. Sales are held between 10 a.m. and 4 p.m. on a day the clerk's office is open. The trustee can postpone, but the sale must happen within 90 days of the original date or be noticed again.

   N.C.G.S. §§ 45-21.17, 45-21.21, 45-21.23

6. The 10-day upset bid period

   After the sale anyone can file a higher bid with the clerk within 10 days. Each new upset bid starts another 10 days. Until the last period ends, you can still stop the foreclosure by paying the full debt plus the sale expenses. When no new bid comes in, the sale becomes final without any court confirmation.

   N.C.G.S. §§ 45-21.27, 45-21.20, 45-21.29A

7. Deed, order for possession and moving out

   The trustee gives the buyer a deed. If you are still in the home, the buyer can ask the clerk for an order for possession after giving you 10 days' notice. The sheriff then carries it out within 5 days of receiving it and must tell you the approximate time first. Plan your move before this point.

   N.C.G.S. §§ 45-21.29(k), 45-21.29(l), 42-36.2

Common questions in North Carolina