North Carolina Foreclosure Laws

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Judicial Foreclosure Available:	Yes
Non-Judicial Foreclosure Available:	Yes
Primary Security Instruments:	Deed of Trust, Mortgage
Timeline:	Typically 60 days
Right of Redemption:	Yes
Deficiency Judgments Allowed:	Varies

In North Carolina, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

Judicial Foreclosure involves the sale of the mortgaged property under the supervision of a court. The property is subject to auction by the county sheriff or some other officer of the court. The proceeds first go to the lender to satisfy the mortgage; then other lien holders; and, finally, to the borrower if any proceeds are left. All parties must be notified of the foreclosure. A judicial decision is announced after pleadings at a hearing in a state or local court.

Non-Judicial Foreclosure (Power of Sale)

Also known as Foreclosure by power of sale, Non-Judicial Foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. This process involves the sale of the property by the mortgage holder without court supervision. It is generally more expedient than foreclosure by judicial sale. As in judicial sale, the mortgage holder and other lien holders are respectively first and second claimants to the proceeds from the sale.

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.

United States Foreclosure Law