Foreclosure is a legal proceeding in which a mortgage or lien holder obtains a court ordered termination of the borrower’s right in the property. This usually is seen in real estate transactions where the owner (mortgagor) is unable to comply with the terms of the Note and Deed of Trust. If you have borrowed money from a bank or other lender to purchase your home (a mortgage) and have failed to make the payments as agreed (or otherwise not followed the terms of the mortgage), the lender may choose to begin foreclosure proceedings. Here are the basic steps in the foreclosure process in North Carolina:
- The borrower is notified the foreclosure process has started.
- Legal paperwork is filed with the Court and copies are served on the borrower and anyone with an interest in the property. This includes anyone with a lien recorded against the property (judgments, tax liens, mechanics liens, etc.), as well as the homeowner’s association, if applicable.
- Hearings are scheduled and parties are notified of the dates.
- If the judge grants the judgment in favor of the lender, formally terminating the interest of the borrower in the property, the judgment is recorded and a sale date for the property to be sold at public auction is set.
There are very complex and binding rules governing foreclosure. Seeking legal advice early in the process is crucial. Brinkley Walser Stoner handles foreclosure proceedings and has a strong history of representation for both commercial lenders and for owners of property involved in foreclosure.
Deeds in Lieu of Foreclosure
A deed in lieu of foreclosure is when the defaulting borrower transfers all interest in the property to the lender in exchange for release from all indebtedness. In the current economic environment, many parties on both sides of the transaction are seeking alternatives to foreclosure; however, great care must be taken in accepting a deed in lieu of foreclosure because of potential problems which can occur in the chain of title.
If you have been notified by your lender of their intent to foreclose on your property or if you intend to begin foreclosure proceedings on a property where you have an interest, you should speak with a real estate attorney to ensure your rights are protected.