Foreclosure Time Line

Below is a general outline of the steps in a North Carolina Special Proceeding Foreclosure

1. Default occurs- Debtor fails to make a payment.
2. Creditor sends acceleration letter which will include the principal due, interest due, late charges, fees, penalties, per diem interest and total due. The Notice of Foreclosure hearing must be filed within 30 days following the date of this letter.
3. Creditor refers case to Trustee – If the original Trustee will not be handling the foreclosure, then the Creditor will execute a document called a Substitution of Trustee. The Substitute Trustee document will be recorded in the local register of deeds before the foreclosure. If the creditor chooses, the Trustee can then send out the letter referenced above rather than the creditor.
4. Trustee updates the title to the property.
5. Notice of Foreclosure Hearing filed with the Clerk in the county where the property is located and hearing is scheduled.
6. A copy of the Notice of Foreclosure Hearing will be served on all debtors and owners. Service may be by sheriff, certified mail and/or posting of the property being foreclosed.
   1. If service is obtained by sheriff or certified mail, it must be served at least 10 days prior to the hearing date.
   2. Service can be obtained by posting the Notice on the property if the debtors or owners cannot be served personally. The Sheriff must post the Notice on the subject property at least 20 days prior to the date of the foreclosure hearing.
7. If service is not timely made, the Trustee will continue the hearing.
8. If service is timely on all debtors and owners and any applicable creditors, then the hearing will be held at the time and date in the Notice. The Clerk will hear the evidence at the hearing and if appropriate, enter an Order allowing the foreclosure to proceed.
9. Once the Clerk signs the Order, the Trustee will post the Notice of Sale on the bulletin board at the courthouse at least 20 days prior to the date of the sale. The Notice of Sale must also be advertised in the legal section of the newspaper. The ad has to run for 2 consecutive weeks prior to the sale date.
10. At the sale, the Trustee will read the Notice of Sale and answer any questions. The Trustee may start the bidding with an opening bid, if the creditor so elects. Thereafter, generally, anyone can bid in any amount. The high bidder will pay the Trustee a deposit of $750 or 5% of the bid, whichever is greater. The Trustee will hold this bid deposit. Any special terms of the sale will be contained in the published Notice of Sale or announced at the Sale by the Trustee.
11. The bid is open for 10 days for raised bids. Any interested party can go to the Office of the Clerk of Court to raise the bid. The bid must be raised by 5% each time. A bid deposit of $750 or 5% is required (whichever is greater). The bid deposit is paid to the Clerk. Once the bid has been in place for 10 days, the Trustee will contact the high bidder to collect the balance of the bid.
12. If there are any raised bids, the Clerk will notify the Trustee who will then notify the prior bidder. The Trustee or the Clerk will return any bid deposits once that person’s bid has been raised.
13. Once the Trustee collects the balance of the purchase price and gives the deed to the buyer, she will then file a Final Account. The Clerk will review all of the receipts and disbursements associated with the foreclosure. If approved, she will sign an Order that finalizes the foreclosure and releases the Trustee.
14. The Trustee will also file a Notice in the Register of Deeds to show that the deed of trust has been foreclosed.

Irvine Law Firm is available to serve as Substitute Trustee or as local counsel for a Substitute Trustee in foreclosure proceedings in any county in North Carolina. Contact us for a quote.