What to do in Foreclosure?

The vast majority of North Carolina’s foreclosures are subject to a non-judicial process, although there is a small amount of court involvement in a non-judicial foreclosure.  North Carolina law requires that a hearing is held with a court clerk who will review all relevant foreclosure documents and certify an actual sale. This is for the protection of the homeowner in foreclosure, and is to ascertain that the lender is actually within their rights to foreclose.

Therefore, a foreclosure can be completed as quickly as 60 days. In most cases, 90 days will pass between receiving the first notice and the actual approved auction of the home. Since 90 days is the best case scenario, it’s safer to assume you have 60 days to work with. If you act quickly, you may be able to sell the home before the foreclosure has been finalized.

A foreclosure costs your lender money. They’ve already lost money due to your defaulted loan, and they have to spend more to foreclose. Homes typically sell for less than full value at an auction, and in some states, lenders can pursue you for a deficiency judgement. This deficiency usually helps lenders make up the difference of their loss. In North Carolina, lenders cannot seek deficiency judgements on purchase money mortgage loans.

This is good news for you in two ways – the first being that you can’t be held accountable for the difference, and the second being that your lender will be willing to let you sell your home before the completion of the foreclosure. Always seek out a home investor. They don’t offer full market value, but it’s very unlikely that your home would sell for full market value at auction. If your lender and an investor can come to an agreement about a sale price, the home can be purchased before the foreclosure and prevent the destruction of your financial history.

It’s worth noting that selling your home this way will still negatively affect your credit score, although it won’t have as significant of an impact as an actual foreclosure. The smaller hit you take, the easier it is to rebound. It’s essentially the difference between walking away with a skinned knee or a broken leg. It isn’t perfect, but it’s a much better alternative.

So if you are in Pre-Foreclosure and you are willing to sell your house, please give us a call at 252-631-6233.