Mortgage Forum

Mike

*Power of Sale Foreclosure Guidelines* If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in North Carolina, a preliminary hearing must be held before a power of sale foreclosure can take place. After the preliminary notices have been issued, the clerk of the court will conduct a hearing to determine whether or not a foreclosure sale may take place. If and when the clerk issues a notice of sale, the foreclosure may proceed as follows:

1. A notice of sale must be: 1) mailed first class mail to the borrower at least twenty (20) days before the sale; 2) published in a newspaper of general circulation in the county where the property is located once a week for two (2) successive weeks, with the last ad being published not less than ten (10) days before the sale; and 3) posted on the courthouse door for twenty (20) days prior to the foreclosure sale. 2. Said notice must name the borrowers, the lenders, provide a description of the property and state the date, time and place of sale. 3. The sale must be conducted at the courthouse in the county where the property is located between the hours of 10:00 am and 4:00 pm. The property will be sold to the highest bidder. Upset bids may be filed with the court clerk for a period of ten (10) days after the foreclosure sale. 4.

The sale may be postponed by announcing the need to postpone at the time and place the regular sale would have taken place. A notice of the postponement, stating the new date and time the foreclosure sale will be held, must be posted on the courthouse door. Lenders may pursue a deficiency judgment and borrowers retain the right to redemption. More information on North Carolina foreclosure laws

*North Carolina Foreclosure is Non-Judicial.* *Right to Foreclose or Sell under Power.* *North Carolina foreclosure* law states that all sales of real property, under a power of sale contained in any mortgage or deed of trust to secure the payment of money, by any mortgagee or trustee, through an agent or attorney for that purpose, appointed orally or in writing by such mortgagee or trustee, whether such writing has been or shall be registered or not, shall be valid, whether or not such mortgagee or trustee was or shall be present at such sale.

*North Carolina Foreclosure Sale of Real Property.* *(a)* Every sale of real property shall be held in the county where the property is situated unless the property consists of a single tract situated in two or more counties. *(b)* A sale of a single tract of real property situated in two or more counties may be held in any one of the counties in which any part of the tract is situated. As used in this section, a "single tract" means any tract which has a continuous boundary, regardless of whether parts thereof may have been acquired at different times or from different persons, or whether it may have been subdivided into other units or lots, or whether it is sold as a whole or in parts. *(c)*

When a mortgage or deed of trust with power of sale of real property designates the place of sale within the county, the sale shall be held at the place so designated. *(d)* When a mortgage or deed of trust with power of sale of real property confers upon the mortgagee or trustee the right to designate the place of sale, the *North Carolina foreclosure* sale shall be held at the place designated by the notice of sale, which place shall be either on the premises to be sold or as follows: *(1)* Property situated wholly within a single county shall be sold at the courthouse door of the county in which the land is situated. *(2)*

A single tract of property situated in two or more counties may be sold at the courthouse door of any one of the counties in which some part of the real property is situated. *(e)* When a mortgage or deed of trust with power of sale of real property does not designate, or confer upon the mortgagee or trustee the right to designate, the place of sale, or when it designates as the place of sale some county in which no part of the property is situated, such real property shall be sold as follows: *(1)* Property situated wholly within a single count shall be sold at the courthouse door of the county in which the land is situated. *(2)* A single tract of property situated in two or more counties may be sold at the courthouse door of any one of the counties in which some part of the real property is situated.

*North Carolina Foreclosure Requirement of Cash Deposit at Sale.* *(a)* If a mortgage or deed of trust contains provisions with respect to a cash deposit at the sale, the terms of the instrument shall be complied with. *(b)* If the instrument contains no provision with respect to a cash deposit at the *North Carolina foreclosure* sale, the mortgagee or trustee may require the highest bidder immediately to make a cash deposit not to exceed the greater of five percent (5%) of the amount of the bid or seven hundred fifty dollars ($750.00). *(c)* If the highest bidder fails to make the required deposit, the person holding the sale may at the same time and place immediately re-offer the property for sale.

*North Carolina Foreclosure Notice of Sale and Hearing.* The mortgagee or trustee granted a power of sale under a mortgage or deed of trust who seeks to exercise such power of sale shall file with the clerk of court a notice of hearing in accordance with the terms of this section. After the notice of hearing is filed, the notice of hearing shall be served upon each party entitled to notice under this section of the *North Carolina foreclosure* laws. The notice shall specify a time and place for the hearing before the clerk of court and shall be served not less than 10 days prior to the date of such hearing.

The notice shall be served and proof of service shall be made in any manner provided by the Rules of Civil Procedure for service of summons, including service by registered mail or certified mail, return receipt requested.

However, in those instances that publication would be authorized, service may be made by posting a notice in a conspicuous place and manner upon the property not less than 20 days prior to the date of the hearing, and if service upon a party cannot be effected after a reasonable and diligent effort in a manner authorized above, notice to such party may be given by posting the notice in a conspicuous place and manner upon the property not less than 20 days prior to the date of hearing. Service by posting may run concurrently with any other effort to effect service. The notice shall be posted by the sheriff. In the event that the service is obtained by posting, an affidavit shall be filed with the clerk of court showing the circumstances warranting the use of service by posting.

If any party is not served or is not timely served prior to the date of the hearing, the clerk shall order the hearing continued to a date and time certain, not less than 10 days from the date scheduled for the original hearing. All notices already timely served remain effective. The mortgagee or trustee shall satisfy the notice requirement of this section with respect to those parties not served or not timely served with respect to the original hearing.

Any party timely served, who has not received actual notice of the date to which the hearing has been continued, shall be sent the order of continuance by first-class mail at his last known address. Notice of hearing shall be served in a manner authorized in subsection (a) upon: *1.* Any person to whom the security interest instrument itself directs notice to be sent in case of default. *2.* Any person obligated to repay the indebtedness against whom the holder thereof intends to assert liability therefore, and any such person not notified shall not be liable for any deficiency remaining after the sale.

*3.* Every record owner of the real estate whose interest is of record in the county where the real property is located at the time the notice of hearing is filed in that county. The term "record owner" means any person owning a present or future interest in the real property, which interest is of record at the time that the notice of hearing is filed and would be affected by the foreclosure proceeding, but does not mean or include the trustee in a deed of trust or the owner or holder of a mortgage, deed of trust, judgment, mechanic's or materialman's lien, or other lien or security interest in the real property.

The nature of the default claimed. *4.* The fact, if such be the case, that the secured creditor has accelerated the maturity of the debt. *5.* Any right of the debtor to pay the indebtedness or cure the default if such is permitted. The holder has confirmed in writing to the person giving the notice, or if the holder is giving the notice, the holder shall confirm in the notice, that, within 30 days of the date of the notice, the debtor was sent by first-class mail at the debtor's last known address a written statement of the amount of principal and interest that the holder claims in good faith is owed as of the date of the written statement, a daily interest charge based on the contract rate as of the date of the statement, and the amount of other expenses the holder contends it is owed as of the date of the statement. *6.*

The right of the debtor (or other party served) to appear before the clerk of court at a time and on a date specified, at which appearance he shall be afforded the opportunity to show cause as to why the foreclosure should not be allowed to be held. The notice shall contain a statement that if the debtor does not intend to contest the creditor's allegations of default, the debtor does not have to appear at the hearing and that his failure to attend the hearing will not affect his right to pay the indebtedness and thereby prevent the proposed sale, or to attend the actual sale, should he elect to do so. *7.*

That if the *North Carolina foreclosure* sale is consummated, the purchaser will be entitled to possession of the real estate as of the date of delivery of his deed, and that the debtor, if still in possession, can then be evicted. The name, address, and telephone number of the trustee or mortgagee. *8.* That the debtor should keep the trustee or mortgagee notified in writing of his address so that he can be mailed copies of the notice of foreclosure setting forth the terms under which the sale will be held, and notice of any postponements or re-sales. *Contents of notice of sale.* The *North Carolina foreclosure* notice of sale shall - *1.* Describe the instrument pursuant to which the sale is held, by identifying the original mortgagors and recording data.

If the record owner is different from the original mortgagors, the notice shall also list the record owner of the property, as reflected on the records of the register of deeds not more than 10 days prior to posting the notice. The notice may also reflect the owner not reflected on the records if known; *2.* Designate the date, hour and place of sale consistent with the provisions of the instrument and this Article; *3.* Describe the real property to be sold in such a manner as is reasonably calculated to inform the public as to what is being sold, which description may be in general terms and may incorporate the description as used in the instrument containing the power of sale by reference thereto. Any property described in the instrument containing the power of sale which is not being offered for sale should also be described in such a manner as to enable prospective purchasers to determine what is and what is not being offered for sale; *4.* State the terms of the sale provided for by the instrument pursuant to which the sale is held, including the amount of the cash deposit, if any, to be made by the highest bidder at the sale; *5.*

A sale shall begin at the time designated in the notice of sale or as soon thereafter as practicable, but not later than one hour after the time fixed therefore unless it is delayed by other sales held at the same place. The sale shall be held between the hours of 10:00 A.M. and 4:00 P.M. on any day other than Sunday or a legal holiday.