NC Foreclosure Process

The foreclosure process varies greatly state by state.  In North Carolina, nearly all foreclosures are carried out via a non-judicial process.  

When you purchased your home, you signed a Deed of Trust.  There are three parties to  that deed of trust:

  • The Trustor:  This is homeowner
  • The Trustee:  This is the entity that holds the title to your property until you’ve paid the mortgage in full.
  • The Beneficiary:  This is the lender.

In North Carolina, the Deed of Trust contains a provision, the power of sale,  that allows the Trustee to sell the Trustor’s property at public auction if the Trustor defaults on the terms of the mortgage.    If the property is sold at auction, the proceeds go to first to pay any taxes and the costs of sale, then to the beneficiary.  In “plain English” this means that if you become sufficiently late on your mortgage payments, the lender has the ability to take your home and sell it at auction in order to recoup the money you borrowed.

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