Foreclosure Law in North Carolina
Foreclosure in Elon, North Carolina is a process that allows a lender to take possession of the property that was used to secure their loan, in the event that the borrower fails to repay it.
A foreclosure usually involves a forced sale of the house at auction, so the bank can recover at least some of the loss it has incurred as a result of the default. Banks usually want to rid themselves of the property as soon as possible, collect as much money as they can from the sale, and then move on.
In every U.S. state, including North Carolina, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is just an auction supervised by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In some states, original mortgages are known as "non-recourse" loans, making the above problem a non-issue. This essentially means that once the mortgaged property is sold by the lender, the debt is discharged, even if the sale nets less than the remaining balance on the mortgage. The borrower will simply have to write this off as a loss. However, this usually does not apply to refinanced or second mortgages.
How to Possibly Avoid Foreclosure in Elon, North Carolina
First and foremost, you need to communicate with your lender, and not dismiss the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be honest with your lender, and stay in touch with them as much as possible.
You should be mindful of the fact that your bank wants you to make your monthly mortgage payments - they likely aren't scheming to trick you into giving up your home. This isn't out of altruism, it's due to the fact that foreclosure is almost never as lucrative for the bank in the long run than a mortgage that is paid in full over a period of years or decades, with interest accruing the whole time. For a bank, a foreclosure is just a last resort to cut their losses.
If you face sudden expenses, such as medical bills or a lawsuit, which put a serious but relatively short-term strain on your finances, you should notify your lender instantly. You might find that they are willing to accept lower payments, if this will keep you from defaulting.
In North Carolina, some buyers have no choice but to resort to a short sale. This is simply the sale of the house, and using the funds to pay off the remainder of the mortgage. One benefit of a short sale is that, if the house sells for less than the mortgage balance, the remaining debt is discharged, and the borrower is free and clear.
Can a Elon, North Carolina real estate attorney help?
If you feel that your home is close to being foreclosed in Elon, North Carolina, and want to try to prevent this, the advice and assistance of an experienced real estate lawyer can mean the difference between keeping or losing your home.