Special Proceeding Foreclosures on behalf of Beneficiary, Creditor or Trustee
Irvine Law Firm assists both individual and commercial creditors who need to collect a debt through foreclosure. When a creditor lends money that is secured by a debtor’s real estate, the debtor executes a promissory note and deed of trust. If the debtor fails to pay as required by the promissory note, the Trustee named on the deed of trust (or a substitute named by the creditor) will file a Special Proceeding in the Office of the Clerk of Superior Court in the county where the land is located. Irvine Law Firm can serve as Substitute Trustee or local counsel for the Substitute Trustee.
Irvine Law Firm is glad to offer services as Substitute Trustee or local counsel for the Substitute Trustee in any county in North Carolina.
General Foreclosure Information
Debtor-the person who owes the money and signed the promissory note.
Creditor-the person or entity to whom the money is owed.
Owner-the person who owns the property given as security for the debt owed to the creditor. The owner and debtor are often the same person, but do not have to be.
Trustee-the Trustee is the middle man between the debtor and creditor. It is the Trustee who files the foreclosure hearing and has the duty of selling the pledged property in order to pay the debt to creditor.
Security-the property that is pledged as security for debtor’s promise to pay creditor (sometimes referred to as the “collateral”).
The foreclosure process begins with the creditor notifying the debtor that the debt is in default and has been accelerated, which means the entire debt is immediately due. At that point, the debtor can try to negotiate options to cure the default or by paying off the debt in full. If the debtor has been unable to satisfy the creditor after receipt of the demand letter, the Trustee will file a Notice of Foreclosure Hearing. This Notice will be served on the debtor and owner of the property. It may also be served on other creditors of the debtor in certain circumstances. The Notice of Foreclosure Hearing will specify a date, place and time for a hearing before the Clerk of Superior Court in the county where the property is located. In the hearing, the Clerk must determine that there was a valid debt, that the debt is in default, that the deed of trust provides that the Trustee can sell the property if the debt is not paid, and that all of the proper parties have been served with the Notice of Foreclosure Hearing. The Clerk must also determine that none of the debtors are serving in the military. If they are, then the matter would be held open until they return. If the property being foreclosed is the debtor’s home, the Clerk will inquire as to the efforts that the creditor and debtor have made in order to resolve the delinquency.
Once the Clerk finds that the grounds for foreclosure have been met, she will enter an order allowing the Trustee to proceed with the foreclosure sale. The Trustee will then post a Notice of Sale on the bulletin board at the courthouse. In addition, the Trustee will advertise the sale in the newspaper. A description of the property to be sold and the terms will be contained in the notice of sale. The Trustee will hold the sale at the appointed place, date and time. The Trustee may or may not have an opening bid. Any people present may bid. Once the Trustee is satisfied that they have the highest bid, she will file a report of sale with the Clerk. Anyone may go into the Clerk of Court’s office and raise the bid during the 10 days following the sale. The bid must be raised by at least 5% and thereafter the sale remains open another 10 days until a bid has been in place for a full 10 days. At that point the Trustee can collect the balance of the purchase price and record a deed to the high bidder. The Trustee will then prepare an accounting of all the foreclosure funds and expenses and present a final account to the Clerk. When the final account is approved by the Clerk, the Trustee is relieved of her duties and the foreclosure is closed.
Please email us at firstname.lastname@example.org. Send us a copy of your Note and Deed of Trust and will gladly provide you with a fixed fee proposal for our services and an estimate of the costs.