When you’re a homeowner, missed mortgage payments can lead to much more than mounting debt and burdensome late fees. At a certain point, failure to pay will result in foreclosure—a legal process that allows lenders to reclaim the property and sell it as an attempt to recoup losses on their initial investment. Fortunately, you may be able to stop a foreclosure if you take action early on to correct the matter with your lender. To help you navigate this process, here are a few frequently asked questions that homeowners have about foreclosing in North Carolina. 

4 North Carolina Foreclosure Questions

What is a title theory state?

North Carolina is a title theory state. In real estate law, title theory means that the lender will hold the title to a property until a mortgage balance is paid off. Holding the title for security only, the lender does not hold any right to possessing the property until the borrower defaults on the home loan.

When can foreclosure happen in North Carolina?

Per federal law, a property usually isn’t eligible for foreclosure until after 120 days of non-payment. During this time, the lender must attempt to reach the borrower by phone no later than 36 days after the missed payment.

At no later than 45 days after the payment due date, the lender must provide a written statement of loss mitigation options—or ways that the borrower can correct the default and maintain ownership.

How do non-judicial and judicial foreclosures differ?

Most foreclosures in North Carolina are non-judicial—or when the lender can privately sell the home according to the loan agreement’s Power of Sale clause due to the borrower defaulting.

Judicial foreclosures are different in that a court must review and approve the case before the lender can move forward with the sale.   

What are my legal options to stop foreclosure?

Being proactive is the best way to correct a default and prevent foreclosure from happening. During the initial phases of contact, lenders are typically open to correcting the problem by creating a repayment plan or restructuring the loan.

If the initial sale has been filed, the property will enter a redemption period. Typically lasting for 10 days, the redemption process allows other interested parties to outbid the last accepted offer. During this time, the borrower also has the right to redeem ownership by paying the debt in full or filing for bankruptcy.

When missed mortgage payments have put you at risk of foreclosure in North Carolina, reach out to C. Roland Krueger Attorney and Counselor at Law. As an experienced foreclosure lawyer in Lexington, NC, Krueger will review every detail of your case to determine the best legal options to preserve your homeowner's status—such as negotiating with the lender or filing for bankruptcy. If your rights as a borrower have been violated, this attorney can also take action against the lender in court. Visit this lawyer online for details about how he can help stop foreclosure or call (336) 248-8464 to schedule a consultation.