Foreclosure occurs when a homeowner is unable to make their mortgage payments on time and has no way to catch up on the missed payments. Because a mortgage is a legal agreement between you and your lender, once you’ve defaulted on the loan, the lender can auction off the property to cover any outstanding debts, leaving you homeless and with terrible credit.
No one wants to receive a notice of foreclosure and yet, in a nationwide study, nearly 1 million Americans were afraid of losing their homes (U.S. Census Bureau Household Pulse Survey, fielded from July 27 to Aug. 8, 2022). Foreclosure can occur from a number of reasons, including:
- Job loss and loss of income
- Divorce or death of a spouse or partner
- Mounting debt, including medical and credit cards
- Moving without being able to sell the home
- Natural disaster
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What Is Foreclosure?
Foreclosure is a legal process that lenders use to recover the balance of a loan when a homeowner stops making mortgage payments. Life can take unexpected turns—whether it’s job loss, a medical emergency, or a divorce, many people find themselves suddenly unable to keep up with monthly bills. One of the most serious consequences of falling behind is the potential loss of your home through foreclosure.
Let’s say you or your spouse recently lost your job. With income reduced or eliminated, even essentials like groceries and utilities become a juggling act—let alone your mortgage. Even after regaining employment, you might be facing an overwhelming pile of missed payments, late fees, and penalties. When your mortgage falls seriously behind and you’re unable to catch up, your lender may initiate the foreclosure process.
During foreclosure, the lender aims to reclaim the property and sell it—often through an auction—to recover the unpaid loan balance. Unfortunately, this means the homeowner can lose the property, along with any equity they may have built. Additionally, foreclosure can severely impact your credit score, making it harder to buy or rent housing, finance a car, or even secure a new job in certain industries.
How Long Do You Have To Get Out of Your House After Foreclosure?
The timeline for foreclosure and eviction varies by state, but here’s a general overview of what most homeowners can expect:
- Missed Payments
Typically, foreclosure begins after 90 days of missed mortgage payments. Your lender will issue a formal notice, and late fees will accrue. - Public Notice
After missed payments, the lender files a Notice of Default (NOD) or a Lis Pendens (in judicial states), letting the public and courts know that foreclosure proceedings are beginning. - Foreclosure Process
- Judicial Foreclosure (common in many states): The lender files a lawsuit and must win a court judgment to proceed. This process can take six months to a year or more.
- Non-Judicial Foreclosure: This bypasses the courts and follows a timeline set by state law, typically moving faster—sometimes within 90 to 120 days of the default notice.
- Auction
If the home isn’t brought current or sold before the deadline, the property is put up for auction, where it’s sold to the highest bidder, or the lender takes possession (becoming Real Estate Owned or REO). - Eviction
After the auction, if you’re still living in the home, the new owner (or the bank, if it didn’t sell) will begin the eviction process. This may involve a notice to vacate, giving you anywhere from 3 to 30 days to move out, depending on your state and local protections.
In total, the process can take as little as four months or stretch out to nine months or more, especially if you pursue options like loan modification, short sale, or bankruptcy—which may delay foreclosure.
What Can You Do Before Foreclosure Happens?
You have options—and the earlier you act, the more likely you can avoid foreclosure entirely. Here are a few possible solutions:
- Loan Modification – Request changes to your loan terms to make payments more manageable.
- Forbearance – Temporarily reduce or pause payments due to hardship.
- Sell Your Home – If you act quickly, you may be able to sell the house before the foreclosure process advances.
- Short Sale – Sell your home for less than the mortgage amount with lender approval.
- Bankruptcy – This legal option may delay or halt foreclosure while restructuring your debts.
Foreclosure is stressful and emotionally draining, but it doesn’t have to define your financial future. Many homeowners bounce back stronger by making informed choices early in the process.
If you’re facing the possibility of foreclosure, it’s wise to consult with a real estate professional, an attorney, or a HUD-approved housing counselor. Acting quickly can preserve your options—and your peace of mind.
The Different Types of Foreclosure
There are two different types of foreclosure you may experience: nonjudicial foreclosure or judicial foreclosure.
What Is Non-Judicial Foreclosure?
A non-judicial foreclosure is a streamlined legal process that allows a lender to reclaim a property without needing to file a lawsuit or appear before a judge. If you’re a homeowner in NC, and your loan agreement includes a power-of-sale clause (typically found in a deed of trust rather than a mortgage), your lender can foreclose outside the court system. This makes it the fastest and least expensive route for lenders to pursue when homeowners default on their payments.
Unlike judicial foreclosure, where a lender must sue the borrower and go through court proceedings, non-judicial foreclosure proceeds according to specific procedures laid out in state law. These laws outline the timeline, required notices, publication of sale, and auction details—eliminating courtroom involvement altogether. This can significantly reduce the time from default to foreclosure sale, often by several months or more, saving the lender both time and legal fees.
How It Works
- Notice of Default
Once a borrower misses a certain number of mortgage payments—usually three or more—the lender issues a Notice of Default. This document formally notifies the homeowner that they are in breach of the loan terms and that the foreclosure process is starting. - Cure Period
In many states, homeowners have a statutory reinstatement period, during which they can “cure” the default by paying back the overdue amount plus any fees. - Notice of Sale
If the default is not resolved, the lender files a Notice of Trustee’s Sale or similar document. This notice is recorded with the county, posted on the property, and published in local newspapers for a specified period (often three weeks or more). - Auction
On the scheduled date, the property is auctioned off to the highest bidder—often at the county courthouse steps. If no one bids high enough, the property typically reverts to the lender and becomes REO (Real Estate Owned).
Pros and Cons of Non-Judicial Foreclosure
For Lenders:
- Pros: Fast, inexpensive, efficient, avoids court backlog.
- Cons: Limited legal recourse if borrower contests.
For Homeowners:
- Pros: The process tends to move faster, which can be beneficial if you’re trying to avoid additional legal costs or want a quicker resolution.
- Cons: Less opportunity to fight the foreclosure, fewer protections, and less time to explore alternatives like short sales or modifications.
What Homeowners Should Know
If you’re facing the possibility of a non-judicial foreclosure in NC, it’s important to act quickly. Since the timeline can move faster than a judicial foreclosure, waiting too long may leave you with fewer options to save your home or protect your credit.
You may still have alternatives such as:
- Loan modification
- Short sale
- Deed in lieu of foreclosure
- Selling your home directly to a cash buyer before auction
At this stage, it’s crucial to consult a housing counselor or foreclosure defense expert. And if you’re considering selling to avoid foreclosure, working with a local, experienced homebuyer can help you avoid the lasting financial impact of a foreclosure on your record.
What Is Judicial Foreclosure?
Judicial foreclosure is a court-supervised process through which a lender seeks to recover the balance of a defaulted loan by forcing the sale of the borrower’s home. In states like NC that require judicial foreclosure, the lender must file a lawsuit against the homeowner in the appropriate court before initiating the foreclosure.
Once the process begins, the court will issue a summons and complaint to the homeowner. This legal notice outlines the lender’s claim and requests the court’s permission to sell the property in order to satisfy the outstanding debt.
Responding Is Critical
If you receive a foreclosure summons, time is of the essence. You are legally required to respond within a specific timeframe—often 20 to 30 days. Ignoring the notice allows the lender to request a default judgment, meaning the court will automatically rule in the lender’s favor without your side being heard. Once granted, this judgment gives the lender legal authority to auction your home.
Even if you do respond, the court process can be lengthy, involving hearings, evidence submission, and legal arguments. Homeowners often choose to work with an attorney to ensure their rights are protected.
What Happens After the Sale?
Once the home is auctioned, the proceeds are applied to your mortgage debt. However, because foreclosure auctions usually result in below-market sales prices, the amount the lender recovers is often less than what you owe.
This creates what’s known as a deficiency balance—the unpaid difference between your loan balance and the sale price. In judicial foreclosures, lenders can seek a deficiency judgment against you, meaning you could still be on the hook for tens (or even hundreds) of thousands of dollars after the sale—even though you no longer own the home.
Why Lenders Prefer to Avoid Judicial Foreclosure
Judicial foreclosure is not just challenging for homeowners—it’s expensive and time-consuming for lenders, too. Between court costs, legal fees, and long wait times, the process can take six months to several years depending on the complexity of the case and the court’s caseload.
That’s why in states where both judicial and non-judicial foreclosure options are available, lenders overwhelmingly prefer non-judicial foreclosure—it’s faster, cheaper, and less paperwork-intensive.
What Can You Do?
If you’re facing judicial foreclosure, you do have options, especially early in the process. These may include:
- Loan modification or forbearance agreements
- Refinancing (if still eligible)
- A short sale approved by the lender
- Deed in lieu of foreclosure
- Selling your house to a cash buyer before judgment
Each option has pros and cons, and the right solution depends on your financial situation and how far along the foreclosure process has gone.
Final Thoughts
Judicial foreclosure can be a frightening and financially devastating experience, but understanding the process empowers you to act. If you’re behind on your mortgage payments in NC, don’t wait for that court notice to arrive. The sooner you act, the more control you have over your outcome.
Need to sell your house fast before it goes to auction? We can help you explore your options and even make a fair cash offer to help you avoid court, save your credit, and move on with peace of mind.
Get an offer today, sell in a matter of days.
How to Sell Your House Before Foreclosure in NC
Let’s break down a few ways you can sell your house, depending on your time frame and situation:
Hire A Real Estate Agent
The first step most Americans think of when selling a house or property is to reach out to a local real estate agent. But there are pros and cons to this option when you are in a difficult situation such as foreclosure. Sure, a good real estate agent can list your property on the MLS and help you get it ready for open houses and daily showings, but they do all of this work so that at the end of the closing process a large chunk of your money from the sale of your house goes to them in the form of the agent’s commission. When you’re already suffering from a mountain of debt and need every penny to pay back your lender, a commission of 3% to 6% of your final sale price may be too hefty an amount to give up.
Plus, there’s the additional fear of not knowing when your house will actually close. Realtors may promise a lot, but at the end of the day you’ll still need to find the right buyer and wait 30+ days for a traditional close. For some homeowners who are facing auction and eviction, even waiting one month might be too long.
Short Sale
If you owe more on your house than it’s worth, your realtor may require what is called a short sale. A short sale is necessary when you owe more on your house than the property is currently worth. For example: if you owe $200,000 on your house but in the current market it’s only worth $150,000, you must deal with a short sale. Though it may seem like a good option, it won’t be fast or easy.
To start off, you’ll first need to get your lender’s approval. To qualify for a short sale, you must prove financial hardship using documentation such as W-2s, medical bills, etc. For a situation such as loss of income, the lender will require that you prove that the loss of income is long-term and unlikely to turn around in your favor. If the lender approves the short sale, you will need to find a real estate agent and attorney that specialize in short sales, and they will still charge you the same amount as they would if you were selling your house with a traditional home sale.
If your foreclosure hasn’t dragged on for too long and you’ve maintained contact with your lender, it’s likely that they will approve the short sale. This allows them to avoid the time and expense of trying to foreclose on your property, while still recouping some of the loss from the missed mortgage payments. But for the regular American homeowner, the short sale will follow them for the next 5 to 7 years.
You may have sold the house and been able to pay off some of your debt, but the short sale can damage your credit the same as if you had declared bankruptcy. The credit unions include the delinquency on your mortgage(s) to your lenders and the short sale on their records, making it nearly impossible for previous homeowners to get a credit card, buy a car, or move into a new house or property for the same amount of time as a bankruptcy.
Sell Your House AS-IS to A Cash Buyer
If you’re under a strict time restraint to sell your house before a foreclosure progresses to auction and eviction, you do have options! You can try to sell your property with a real estate agent, work with your lender to complete a short sale, or – best of all – turn to a trusted and reliable cash investor to help you with your situation.
Some of the benefits of selling to a direct cash investor include:
- A quick and pain-free closing process.
- Avoid paying any commissions or fees.
- You won’t have to worry about marketing your house and waiting for a buyer.
- No need to clean-up or complete any repairs!
When you sell your home as-is to a direct cash buyer, you not only can avoid losing your home to an auction, but you also may be able to sell the property for enough money to get out of financial debt. Moving on with your life without the burden of a monthly mortgage payment and debt hanging over your head is one of the best gifts you can give yourself!
Can You Stop Foreclosure Once it Starts?
Pay Off Your Loan & Fees
You’ve found yourself in a difficult situation. Your debt is adding up while your finances remain the same. It’s time to get serious and look at ways to pay down your debt quickly. Do you have any items you can liquidate? Maybe you have friends or family that can gift you money or provide you with a loan until you get back on track. If you are serious about paying down your debt and stopping foreclosure, you may need a financial professional to help you restructure your budget. Use one of these solutions or combine them all to help climb that avalanche of debt and get back to living a life free of stress.
Declare Bankruptcy
As a last resort, bankruptcy may help you stop the foreclosure of your home but it comes with a high cost. The bankruptcy process is complex and will require a lawyer that specializes in bankruptcy law. If the court approves your petition, you will be entered into a government-approved credit counseling program and the bankruptcy will be reported on your credit report for 7 years. A bankruptcy affects all areas of your life, including when you try to purchase a car, apply for a credit card or bank account, and can disqualify you from future rentals.
The Homeowner Affordability and Stability Plan (HASP)
If your debt is higher than your income, you may be eligible for the Homeowner Affordability & Stability Plan (HASP). HASP is a loan modification program targeted at borrowers who are at risk of foreclosure due to insufficient income. This government program was designed to help homeowners in the United States restructure their monthly payments to fit a limited budget. Apply for the program here to see if you qualify.
Sell Your House Fast to a Cash Buyer
Are you ready to sell your house but don’t have the time to wait 30+ days for a traditional close? Does a short sale seem like a fast way to ruin your credit? Prefer to pay off all your debt at once and get the bank off your back fast? A direct home buyer and cash investor might be exactly the solution you’ve been searching for! When you work with a trusted and reliable investor with a great reputation in your area, you’ll find a helpful company with cash on hand that is ready to purchase your home from your as-is. With a cash buyer, you can skip the lengthy process of foreclosure, eviction, and auction within a matter of days, and save your credit as well!
You may not get full market value for your house or property when you sell to a trusted cash investor, but the timeliness of a fast closing, and the lack of fees, required inspections, and commissions often balance this out at close. Best of all, because an investor can close fast, you can often close before the bank is able to auction off your property! This means you can sell the property for the amount that benefits you versus the pennies to the dollar price the bank will often try to sell your house for just to get it off the books.
We Buy Houses in Foreclosure & Pre-foreclosure–
Get Your Offer Today!
Does the idea of finally walking away from a property without the storm cloud of foreclosure hanging over your head? Contact a real professional at Coastal NC Cash Offer to find out more and get a fair cash offer for your property today.