Case Law Blog

By: Lanée Borsman, John Kay, and Alan Stewart Although we may have thought the border between South Carolina and North Carolina was firmly established when the Province of Carolina was divided in 1729, the truth is that the line thought of as the border between the two new colonies contained numerous and substantial errors in its measurements.  These discrepancies in the border have now been resolved through cooperation of the two states by a comprehensive re-survey of the North Carolina/South Carolina boundary line. 
The North Carolina Supreme Court dealt a major blow to consumer attempts to evade personal liability for a deficiency balance after a non-judicial foreclosure sale in United Community Bank (Ga.) v. Wolfe, No. 289PA15 (May 5,2017).
(With Apologies and Deference to Charles Dickens and Oscar Wilde) Every so often, a North Carolina appellate court will issue an opinion that is useful to the mortgage servicing industry not so much for its substantive holding but for the practical guidance that may be gleaned from its dicta.  One such case is In re: Foreclosure of Real Property Under Deed of Trust From Garrett, 795 S.E.2d 1 (N.C. Ct. App. 2016) which involved the following relevant facts:  
South Carolina: Bankruptcy Court Moves to Conduit Mortgage Payments Effective October 1, 2016.  By John B. Kelchner and John S. Kay | Hutchens Law Firm – USFN Member (SC)
In a case ably defended by our own Lacey Moore, Creditors' Rights Attorney in the Charlotte office, on April 5, 2016 the North Carolina Court of Appeals affirmed the dismissal of an action brought by a former borrower seeking to enjoin the sale of the foreclosed property.  While not breaking any new legal ground the opinion reminds us of the following legal principles:
The Statute of Limitations and Two-Dismissal Rule and their Impact on Foreclosure Filings
Third Party Bidder Failing to Complete Purchase Loses Deposit Despite Reduced Resale Bid by Foreclosing Creditor 
Production of Original Note Indorsed in Blank Is Alone Sufficient to Prove Petitioner Is Holder of Valid Debt Under North Carolina Special Proceeding Foreclosure Statute
A Blow to the “You Can’t Prove You’re the Holder” Defense
Borrower’s Defense to Deficiency Action Where Lender Purchases Secured Property at Less than True Value Now Available to Guarantor The guaranty agreement is a common security mechanism lenders utilize to increase the likelihood of repayment of a commercial loan in the event of default.    This is especially true in situations where the borrower is a limited asset or one asset business.  In such circumstances, the lender often looks to the member/manager(s) of the business to guarantee the debt obligation.