Can a lender get a deficiency judgment in North Carolina?

A deficiency judgment occurs when a piece of property goes into foreclosure. The property is then sold at a price less than what the borrower paid for it. This leaves a deficiency between what it cost and what the lender receives upon its sale. Under law, several states have enacted an anti deficiency statute. If you live in North Carolina, you may wonder is North Carolina an anti deficiency state. If it is, can a lender obtain a deficiency judgment?

Obtaining a Deficiency Judgment in North Carolina

Yes, it is possible to obtain a deficiency judgment in North Carolina. However, this does only apply to instances where the property in foreclosure did not proceed to a court judgment. The borrower must sign over the property. Under a Power of Sale, the property then is sold at a public auction.

If you are a lender, you only need to prove the fair value of the property differs in your favor from the recorded sale’s price to proceed to obtain a deficiency judgment. This procedure and rules are located in Chapter 45 of the North Carolina General Statutes. If you are the borrower or former mortgagor, you must prove there is no difference. Alternatively, you can argue that there is a serious discrepancy between the sale’s price and the actual value of the land, in your favor.

Seek Out a Lawyer’s Advice

If you are facing foreclosure, consider your options carefully. Talk to a qualified North Carolina lawyer. He or she can help you prepare a defense against a possible deficiency judgment.