A power of sale foreclosure under North Carolina General Statutes Chapter 45 is intended to provide an efficient and expeditious alternative to a judicial foreclosure. In re Adams, 204 N.C. App. 318, 321 (2010). The authority of a lender to elect a power of sale foreclosure (sometimes referred to as a “non-judicial foreclosure”) typically arises based on an agreement between the borrower and the lender when a mortgage loan is made and is frequently evidenced by the power of sale provision in the deed of trust. Whereas a judicial foreclosure requires the filing of a civil action in district or superior court, a power of sale foreclosure is filed before the clerk of superior court. G.S. 45-21.16(a). A trustee, who is a fiduciary and a neutral party, files a notice of hearing to initiate the proceeding. G.S. 45-21.16(a), (c)(7)b. If after a hearing the clerk finds the existence of six factors, then the clerk enters an order authorizing the foreclosure sale. G.S. 45-21.16(d). The act of the clerk in finding or refusing to find the existence of the six factors is a judicial act. G.S. 45-21.16(d1).
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Tag: Foreclosure
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More on the Protecting Tenants at Foreclosure Act
* Note, this post focuses solely on the application of the federal Protecting Tenants at Foreclosure Act to Chapter 45 power of sale foreclosure proceedings. Many foreclosures and evictions of occupants from properties acquired through foreclosure, including pursuant to an order for possession under G.S. 45-21.29(k) (the subject of this post), remain subject to a federal moratorium due to the pandemic. This moratorium was recently extended through December 31, 2020. To read more about current federal and state limits imposed on foreclosure proceedings due to the pandemic, click here.
A borrower stops making his home mortgage payments. A lender files a power of sale foreclosure pursuant to G.S. Chapter 45 to foreclose the lien of the deed of trust. After title to the property is transferred to a new owner out of the foreclosure, an occupant remains on the property. The new owner of the property, also known as the successor in interest, files a petition with the clerk of superior court under G.S. 45-21.29(k) for an order for possession. The petition and other evidence provided by the petitioner meet requirements of subsection (k) but the petition also states the occupant is a bona fide tenant.* Continue Reading
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Expiration and Extension of Federal and State Limits on Foreclosures in North Carolina
UPDATE (June 28, 2021): The federal moratorium on foreclosures and evictions from properties subject to foreclosure is extended for many loans.
- The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend the moratorium on single-family foreclosures and real estate owned evictions through July 31, 2021.
- The U.S. Department of Housing and Urban Development through the Federal Housing Administration announced an extension of its foreclosure and eviction moratorium through July 31, 2021 related to FHA insured loans.
- The Department of Veterans Affairs announced an extension of the foreclosure moratorium on VA-guaranteed loans through July 31, 2021.
- The U.S. Department of Agriculture announced an extension of the foreclosure and eviction moratorium for all USDA Single Family Housing direct and guaranteed loans through July 31, 2021.
A press release issued by the White House on June 24, 2021 indicates that this will be the final extension of the foreclosure moratorium.
Continue Reading - The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend the moratorium on single-family foreclosures and real estate owned evictions through July 31, 2021.
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Federal and State Limits on Foreclosures in North Carolina in Response to COVID-19
UPDATE #3 (May 29, 2020): For more recent updates, refer to this blog post.
UPDATE #2 (April 14, 2020): The Chief Justice of the North Carolina Supreme Court entered two orders in April of 2020.
- The April 2nd order directs that all proceedings, including proceedings before clerks of superior court, must be scheduled or rescheduled for a date no sooner than June 1 unless an exception to this directive applies. One exception includes if the proceeding will be conducted remotely; a remote proceeding may not be without the consent of each party. See April 2nd Order, Emergency Directive 1 and 3. This order extends the dates in the March 16 order discussed in the post below from April 15 to June 1.
- The April 13th order extends the date to file documents and to take certain acts to the close of business on June 1. This extends the dates in the March 19 order discussed in the post below from April 17 to June 1.
UPDATE #1 (March 30, 2020): On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Section 4022(c)(2) of the CARES Act provides that “a servicer of a Federally back mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.” This moratorium does not apply to a vacant or abandoned property. A “Federally backed mortgage loan” is defined in Section 4022(a)(2) as “any loan which is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1- to 4- families that is
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Where are We Now: The Protecting Tenants at Foreclosure Act
As I noted in a prior blog post, the US Congress restored the federal Protecting Tenants at Foreclosure Act (PTFA) without expiration on June 23, 2018. The PTFA has been in effect, expired, and restored at various points over the past decade. During one period after the PTFA expired, the NC General Assembly passed a law (S.L. 2015-178) to provide somewhat similar (but not exact, more on that below) protections for tenants of foreclosed property under state law. Most recently, the NC General Assembly took action to repeal that law in light of the permanent restoration of the PTFA. See S.L. 2019-53 and S.L. 2019-243. This blog post tracks where we’ve been and where the law currently stands related to the PTFA and power of sale foreclosures under G.S. Chapter 45 in NC.
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