Foreclosure in any aspect is a negative situation. No homeowner will ever want to foreclose their home because of any financial crisis. Facing foreclosure is an awful situation. There are two ways through which the foreclosure takes place: Judicial and Non-Judicial. North Carolina allows a non-judicial foreclosure. The foreclosure process has to follow state law. There are ways to stop foreclosure, through which you can save your home.
What Does Foreclosure Means?
Taking a loan from a bank or a lender to buy a house or property is very common everywhere. Paying back the borrowed amount in the given time duration is also very important. If someone fails to pay back the loan amount, the foreclosure situation is very likely to come into existence. Foreclosure begins after the very first missed payment.
Foreclosure can also happen if the homeowner fails to pay the property tax levied upon them. There are various reasons for falling behind in payments like, financial crisis, medical emergencies, and sudden loss of job.
Introduction to Foreclosure in North Carolina
The foreclosure crisis peaked in 2010. The foreclosure process and mortgage services were heavily supported by state and federal laws after that. In North Carolina, people must sign a promissory note and mortgage when they take a loan to buy property. These documents give people some contractual rights as well.
North Carolina foreclosures most likely give you the right to many benefits. They are:
- Receive notice in the form of a breach letter before foreclosure.
- You can apply for loan mitigation.
- If you are in the military, you will get special protection.
- Get notified about the foreclosure and chance to respond legally.
- Pay off your debt to prevent a foreclosure sale.
- You can redeem the property after the sale.
- Get any excess money after a foreclosure sale.
Key Points About North Carolina Foreclosure
- Primary Security Instrument- Mortgage and Deed of Trust
- Judicial Foreclosure- Yes
- Non-Judicial Foreclosure- Yes
- Right of Redemption- Yes
- Timeline- Typically 60 Days
- Deficiency Judgements Allowed- Varies
Ways to Stop Foreclosure in North Carolina
There are ways of stopping home foreclosures in North Carolina that you need to know. Let’s cover them all:
Declare Bankruptcy
Yes, bankruptcy is a way through which foreclosure can be stopped. But you need to understand the concept of chapter 7 and chapter 13 of bankruptcy.
Chapter 13 bankruptcy in North Carolina: It is a common option to go for to stop foreclosure. According to chapter 13 bankruptcy, you are given a payment plan of 3 or 5 years to catch up with the payment in arrears. The lenders will be given orders to stop going forward with the foreclosure process. They will have to give you time to get back to your payment arrangements.
Chapter 7 bankruptcy in North Carolina: It is a liquidation form of bankruptcy. Unless you want the North Carolina bankruptcy trustee to sell your house, it may be a less common option to pursue. Even though it is the lower-cost bankruptcy option, you still may not want to opt for this option.
You need to understand what your payment plan is. Is your payment plan regarding chapter 13 bankruptcy worth pursuing? For instance: you have $150,000 in arrears on your house and your payment plan is for 5 years / 60 months. Will you be able to pay an additional $2,500 every month to cover your arrears?
Applying for Loan Modification
It has become difficult to fully pay off the mortgage payments. There are many reasons why you can miss out on payments or get late in paying the mortgage. Before this unwanted thing happens, you may go to your lender and find out if they consider a loan modification option.
Reinstating Your Loan
Do you have enough cash to pay off all the loan amount? Approach your lender with a cash offer for your house in North Carolina. See if they accept the payment and permit you to continue paying your loan amount without any legal interference. Lenders only want to recover the loan amount and so they will accept your offer.
» North Carolina Lenders: Read the blog to know about the best mortgage lenders in North Carolina.
Plan for Repayment
Great! You can make payments again after missing out on some payments. Find out what your lender thinks regarding your repayment plan. In the repayment plan, you are allowed to pay the missed payments slowly along with the current mortgage payments. You can come up with an agreement on the repayment plan to stop foreclosure. According to this, you agree to pay your missed payments along with the normal payments.
Refinancing
Refinancing may be a difficult option to consider. Interest rates are going up only making it difficult to think of loans. You can start with a new lender which means a whole new agreement. There may be one drawback. It might become difficult to qualify for refinancing if your credit score is negatively affected.
» How to Buy a House with Bad Credit in North Carolina: Read the blog to know how you can buy a house with a bad credit.
Sell Out Your Home
It’s really sad even to think of selling your house. But it is actually a good option to consider selling your house in North Carolina to avoid foreclosure. You may receive an amount more than the actual price of your home. Perhaps you could even buy a house worth more than the one you sold. You can stop something drastic from happening and your credit report will also not get spoilt.
Short Sale
A short sale means that you can sell your home for an amount that is less than the amount you owe. The reason behind this is that sometimes foreclosure homes are sold for a lesser amount in the auction. The bank/lender is sometimes not able to recover the whole amount they are hoping for. Home staging companies in North Carolina can help you get more than the asking price.
Deed In Lieu of Foreclosure
A deed in lieu of foreclosure takes place when the homeowner transfers the property to the lender. The homeowner hand over the property to the lender, clearing all the debts they owe. The property is then owned by the lender. You have to vacate the property as soon as possible. This way you can easily save yourself from any damage.
Frequently Asked Questions
How long does it take to foreclose on a property in North Carolina?
Approximately Three Months.
How Long Does the Typical Foreclosure Process Take in North Carolina? It takes approximately three months to complete a non judicial foreclosure in North Carolina if everything goes smoothly. It may take longer than three months if the borrower fights the foreclosure or if the lender seeks a judicial foreclosure.
How does the foreclosure process work in North Carolina?
When you are behind on your mortgage, the lender will instruct the trustee to foreclose. After verifying that you are behind, the trustee then files a "special proceeding" at the county courthouse and also sends you notice. A "foreclosure hearing" is held first and takes place at the county courthouse.
What are the foreclosure laws in North Carolina?
North Carolina is a power of sale foreclosure jurisdiction. This means that unlike many other states in which a lender seeking to foreclose must go through a lengthy judicial process in order to regain collateral (your house), North Carolina lenders may foreclose through a private sale process.
How long can you not pay property taxes before foreclosure NC?
After three months, the court can issue an execution, and the sheriff will sell your home to satisfy the tax debt.
Also Read
- How to Stop Foreclosure: Read the blog to know how you can stop foreclosure on your property.
- How to Avoid Foreclosure: Find out the ways by which you can avoid foreclosures so that you don’t have to face the foreclosure situation.
Recommended
- Selling a Home As Is in North Carolina: Read the blog to know about selling a house as is in North Carolina.
- Sell my House Fast for Cash: Check out the blog to see how to sell your house fast for cash.
- North Carolina Closing Costs: Read out the blog to find out how much are closing costs in North Carolina.
- Who Pays Closing Costs North Carolina: Find out who pays closing costs after the sale of a property in North Carolina.
- How to Get Preapproved for a Mortgage: Go through the blog to know about the process of getting preapproved mortgage.
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