Judicial Foreclosures

Have you ever vigilantly worked on a jigsaw puzzle, only to discover that it’s missing the one piece you need to finish? It’s frustrating. The same holds true in mortgage servicing, where errors and mistakes performed at loan origination rise to the forefront in foreclosure, preventing you from effectively recovering your collateral. Can the problem be solved, can the cost be kept down and can the time frame be short?

In many instances, the answer to these questions is yes. In conjunction with the popular power of sale provision in a deed of trust, North Carolina law also allows creditors to file a civil action in state court seeking recovery of collateral. At the same time, the filing creditor may bring additional claims to clear title to the property, or further seek a monetary judgment against the borrower.

While the judicial sale provision conveniently allows a creditor the ability to mend defects in title, it is not without its complications. Only a small fraction of the foreclosures filed in North Carolina proceed in a setting before a judge, likewise leaving a small percentage of attorneys who routinely work in this field.

In addition, a judicial foreclosure bears unique and differing provisions for serving defendants, submitting evidence, time frames and procedures when compared to conducting the more popular power of sale foreclosure before a Clerk of Court. An equally important consideration is that filing a judicial foreclosure in state Court allows a debtor the option of filing counterclaims against the creditor.

Let our office take the frustration and guesswork out of the equation. We provide seasoned advice and advocacy in judicial foreclosures and title curative litigation ranging from a simple reformation of a clerical error to the more complex priority disputes between creditors.

With the cumulative experience of our attorneys exceeding over a quarter century in this field, we possess the skill and knowledge to cure just about any title issue, along with the wisdom and judgment to effectively defend you in the event a debtor files an adverse claim against you.

With three offices strategically located throughout the state and a practice spanning all 100 counties, we have the staff to move your case along expeditiously. This state-wide presence further affords our office the capability to conduct your title-curative action in a cost-effective manner, regardless of venue. Contact our office today, and let us help you find the missing piece to the puzzle.

Non-Judicial Foreclosures in North Carolina

After exhausting all avenues for collection of mortgage debts, certain circumstances allow for non-judicial foreclosure proceedings to reclaim your property, your debt, and mitigate losses.

A Power of Sale foreclosure, often referred to as a Non-Judicial foreclosure in the State of North Carolina, varies greatly and is much more complex than the same procedure in most other states. The process of obtaining an Order from the Clerk of Superior Court at a Hearing which may be attended by the borrower(s) and counsel essentially transforms the process to “quasi-judicial” and requires in-depth review as the matter proceeds. Our attorneys have extensive experience spanning more than 30 years in all three stages of the process.

Stage 1: Preparation and Documentation

The key to efficiency is the receipt of a complete referral (in which all relevant documentation and history transferred) from the client, including the statutory notice to the borrowers required for all home loans as well as evidence that the loan was properly registered with the state. All documents received from the client are reviewed and input into the firm’s case management system, the military and bankruptcy searches are done throughout the foreclosure process at all critical stages including those that are client mandated, and the title search is begun. In addition, two additional notices required by statute are prepared and sent to the borrower(s) and the Appointment of Substitute Trustee is prepared and sent to the client for execution; thereafter, it is recorded in the Registry of Deeds.

Stage 2: Review, Notices and Hearing

The second stage of the process includes review of the title search and attendant clearing of title issues, obtaining the hearing date from the county clerk’s office, and preparation of the notice of hearing, notice of sale, and the Affidavit of Indebtedness which is sent to the client for review and execution. After filing the notice of hearing, service is obtained. Depending on client requests, military and bankruptcy searches are done again and re-checked throughout the process.

At the hearing the clerk is required to make six findings and issue an order permitting the Substitute Trustee to hold the sale. The clerk may also continue the hearing pursuant to statute if the home is the principal residence of the borrower(s) and the clerk finds that the initiation or continuation of loss mitigation discussions could resolve the delinquency. If the order is signed, the Notice of Sale is posted and mailed to the appropriate parties, including the Internal Revenue Service which requires a special notice.

Stage 3: The Sale

The sale is held at the courthouse pursuant to the notice and a Report of Sale is filed. There is a ten day confirmation period during which time the bid may be upset. Assuming no upset bids, the final three documents which must be prepared are the Trustee’s Deed and Notice of Foreclosure, both of which are recorded in the Registry of Deeds, and the Final Report and Account which is filed with the clerk and is an audit of the accounting concerning the sale.

If the foreclosure is uncontested and there are no continuances or postponements, the process should be complete in 150 days. Delays may be due to scheduling backlogs in the county, title or mobile home issues, bankruptcy, or loss mitigation review.