In North Carolina, foreclosure right of redemption or the foreclosure redemption period is fairly short at just ten days, unless the tenth day after the foreclosure sale falls on a Sunday or legal holiday, in which case the foreclosure redemption period would end on the next business day.
- Redemption rights in a foreclosure refers the right that the debtor or mortgagee has to reclaim their home or property by paying the amount of the loan in full plus costs.
- If you are married, and even if the mortgage (or Deed of Trust as they are known in North Carolina) was only in one spouse's name, the other spouse also has the right of redemption to reclaim the property.
- In North Carolina, your right of redemption exists if whether the foreclosure was non-judicial or judicial.
Title Theory State
North Carolina is what is known as a title theory state, which means that the the property is held in a Deed of Trust until the loan is paid off. The Deed of Trust is recorded at closing with the Deed.
Many Deeds of Trust contain language known as a "power of sale clause". In this clause, the mortgagee/borrower is agreeing that the lender will have the right to assign a trustee and foreclose on the property if the borrower becomes delinquent in their payments. Closing attorneys are usually very diligent to explain this part of the Deed of Trust at closing to the borrowers, making them aware of the remedies their lender can and will take if they stop making or are late with their payments.
- When a Deed of Trust contains a "power of sale clause" the foreclosure is called non-judicial because no court order is required to complete the foreclosure process.
- This is the most common type of foreclosure in North Carolina.
Notice
North Carolina law contains strict rules about the timing of notice to the borrower prior to the foreclosure. This is called the "notice of sale".
- Must be mailed mailed to the borrower via first class mail at least 20 days before the foreclosure sale date.
- Published in a newspaper that is circulated in the same county where the house or property is located once a week for two weeks, with the final advertisement of the sale happening at least 10 days before the sale.
- Posted at the court house for at least 20 days prior to the sale.
Upset Bid Process
In addition to the borrower's right of redemption for up to 10 days after the foreclosure sale, there is also an upset bid process whereby any other bidder may bid at least 5% or $750 more (whichever is greater) for the property.
- This does not eliminate the original owner's right of redemption.
- If an upset bid is entered, a new 10 day bid upset period begins.
Get Legal Help
If you have missed one or two mortgage payments and are at risk of being foreclosed on, or if you have already received paperwork from your lender about a foreclosure sale, contact an attorney who is experienced in real estate and foreclosure law as soon as possible. The earlier you get your own legal representation involved, the higher chance you have of a better outcome.
