How Does The Foreclosure Process Work in North Carolina?

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments. The lender takes the property away from the homeowner and sells it to pay off the debt; however, the homeowner can work out a deal with the lender to keep the home and continue paying the mortgage.

In North Carolina, the foreclosure process has different stages in which your options to keep your home gradually diminish. If you are facing foreclosure or your lender is threatening to foreclose on your home, keep reading to understand the whole process and your options.


Types of Foreclosure in North Carolina

There are 2 types of foreclosure in North Carolina: 


1. Judicial Foreclosure

This is the most common type in North Carolina. As its name suggests, this type of foreclosure entails legal procedures and court orders. Judicial foreclosure has these stages:


In this step, the lender sends a Notice of Default, better known as “breach letter,” notifying that you have failed to make payments on your loan, and you can get evicted if you don’t take action.

Lenders can only send a breach letter if the homeowner is at least 120 days delinquent on their mortgage payments. Once the homeowner receives the letter, they have 45 days to pay or arrange an agreement.

Notice of Hearing

At this point, the foreclosure has officially started. The lender files a “Notice of Hearing” with the court clerk, which means the homeowner is summoned to appear in court. The Notice of Hearing must be personally given to the homeowner at least 10 days before the hearing or 20 days if the notice is posted on the property.

Foreclosure Hearing

The court evaluates certain issues, like if the homeowner is delinquent on their mortgage payments and if the lender is following the state’s foreclosure procedures correctly.

If the judge rules in favor of the lender, they will issue an “Order of Sale.” This order allows the lender to sell your home at an auction to recoup their losses.

The Sale

Once the judge issues the order, the borrower receives a Notice of Sale at least 20 days before the sale. Since the sale is a public auction, anyone can bid on the house, including the homeowner.

The homeowner is still entitled to the “right of redemption” after the sale. This right allows the borrower to keep their home by paying off the entire mortgage debt within a set period, usually about 10 days.


2. Nonjudicial Foreclosure

The nonjudicial foreclosure process is faster because it doesn’t go through the court system. This foreclosure is legal if the loan contract has a “power of sale” clause that authorizes the foreclosure without a hearing. The process follows the regular phases, except for the Notice of Hearing and Foreclosure Hearing.


5 Tips to Avoid Foreclosure

You can avoid foreclosure with any of the following tips:

  1. Reinstating the Loan: If you have the money, you can catch up on your payments and bring your loan current.
  2. Filing for bankruptcy: This might stop the foreclosure process for a while, but you will lose your home eventually if you don’t make your payments.
  3. Workout agreement: Reach out to your lender to agree on a new payment plan or modify the terms of your loan.
  4. Refinance your mortgage: You can take out a new loan with different terms to replace your current mortgage.
  5. Sell your house: You can sell your house and use the money to pay off your mortgage debt. You can do it yourself, through a real estate agent, or directly to a cash home buyer.


Travis Buys Homes Helps You Avoid Foreclosure

If you receive a breach letter or you can’t afford your mortgage, sell your house to Travis Buys Homes and avoid the hassle and consequences of foreclosure. We buy houses fast and pay cash to help you move on with your life. Our #1 purpose is to help you get out of the most sticky real estate situations by bringing a solution that better suits your requirements.

Being evicted, lawyers’ commissions, fees, and a damaged credit score are just some of the foreclosure effects you can avoid by selling your house to us. Our team is here to help you through the entire process and answer all of your questions.

Plus, we will take care of all the paperwork, inspections, repairs, and upgrades so you can focus on more important things in your life. So stop searching “sell my house fast in North Carolina,” and contact Travis Buys Homes now to sell your property and avoid foreclosure.