Case Law Blog

Following a foreclosure sale the general rule is that the amount of the debt is reduced by the net proceeds realized from the sale, setting the deficiency amount the foreclosing creditor may seek to recover.  N.C.G.S. § 45-21.31(a)(4).  However, when the foreclosing creditor is the successful high bidder at the foreclosure sale this general rule is abrogated by N.C.G.S. §45-21.36, which provides the debtor with two alternative defenses.  Branch Banking & Trust Co. v. Smith, 769 S.E.2d 638, 640 (N.C. Ct. App., 2015).
Given the increased emphasis on compliance with consumer-protection laws in recent years, it is expected that banks and mortgage companies will be familiar with all the federal laws and regulations impacting lending and servicing.  However, it is also important to remember that the individual States often have their own regulatory framework that must be adhered to.
Although the federal Protecting Tenants at Foreclosure Act expired in December 2014, when Congress declined to extend its terms, North Carolina enacted legislation, which became effective on October 1, 2015, which provides similar protections to tenants occupying foreclosed residential property.  North Carolina Session Law 2015-178 added a new section to the power of sale foreclosure statute, § 45-21.33A, which provides that:
Congress Enacts Extension to SCRA Protections impacting Foreclosures
Purchaser of Defaulted Debt not Subject to FDCPA Liability Because it Acts as Creditor, not Debt Collector The United States Circuit Court for the 4th Circuit, which governs Delaware, Maryland, North Carolina, South Carolina, Virginia and West Virginia issued a significant published opinion favorable to creditors in Henson v. Santander Consumer USA, Inc., 2016 WL 1128419 (4th Cir. 2016).
The Federal Rules of Civil Procedure are designed, in part, to promote judicial economy and efficiency in the conduct of litigation.  One particular rule supporting this goal is Rule 13(a), which requires: (1) In General. A pleading must state as a counterclaim any claim that--at the time of its service--the pleader has against an opposing party if the claim: (A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; and (B) does not require adding another party over whom the court cannot acquire jurisdiction.
Jeffrey Bunda | December 2015 Borrowers Face Twin Hurdles Challenging Post-Foreclosure Property Preservation Activities:  Security Instruments Permit Entry and Noteholder Not Vicariously Liable for Contractors’ Actions
South Carolina Court of Appeals Confirms Business Records Exception to Hearsay Rule is Available to Servicer Relying on Prior Servicer’s Records, But Warns Proper Procedures Must be Followed to Take Advantage of the Exception.
John S. Kay | January 2016 Lenders Do Not Engage in the Unauthorized Practice of Law in South Carolina by Preparing and Mailing Loan Modifications to Borrowers Without the Participation of a Licensed Attorney.
By John S. Kay and John B. Kelchner | January 2016

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