forclosed on

I owned a property that went through forclosure. I have been told that if the bank sells the property for less than the balance on my loan, that there can be a defficiency judgement. However, i was also told that if they sell it for more than the balance on the loan, that the lender has to split the overage with me. What is the law in NC.

Edited: 06/26/2010 at 03:56AM

Greg E

· Sacramento, CA

108 posts
50 influence

Aug 31 '07, 03:53 AM

If the property went through foreclosure and the bank now owns it they are free to sell it as they wish. If they sell it for more than what was owed they can keep the excess - you are only entitled to excess proceeds from the foreclosure sale/auction.

You can review the laws for your state at http://stopforeclosure.com/North_Carolina_Foreclosure_Law.htm

Edited: 06/26/2010 at 03:56AM

Jeff Richman

Real Estate Investor · Charlotte, North Carolina

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2 awards
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Dec 11 '09, 12:57 PM

I happen to do a lot of business in the surplus fund, excess proceeds and remainder business (whatever you prefer) in the NC area and what you are being told is only half true.

If the property sells at foreclosure auction for more than what is owed to the bank(s), then they cannot, by law keep the surplus.

All the surplus is due you, there is no "splitting" with the bank. It is all yours.

Edited: 06/26/2010 at 10:49AM

NC Mark

Real Estate Investor · North Carolina

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Dec 11 '09, 07:57 PM

Interesting post, Jeff.

However, if no one bids on the courthouse steps (not uncommon here), and the bank subsequently lists with a brokerage, then the bank can keep any surplus from the brokered sale (or eat any loss), correct?

Edited: 06/26/2010 at 10:49AM

Rich Weese

Real Estate Investor · sioux falls, South Dakota

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Dec 11 '09, 08:34 PM

Both replies seem correct. The difference is which sale you're talking about.Jeff is talking about the actual foreclosure sale, and Mark is talking about the FOLLOWING sale, after foreclosure process was completed. Rich

Edited: 06/26/2010 at 10:49AM

Jeff Richman

Real Estate Investor · Charlotte, North Carolina

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2 awards
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Apr 18 '11, 09:32 PM

Hi NC Mark,

If no one bids on the property at the steps, then the bank will take back the property. Once they own it, they can do what they want with it and sell it for whatever they can get.

If there is any kind of surplus or overage, then the bank will get it because they are the owner of record at the time of sale.

Jeff Richman

Real Estate Investor · Charlotte, North Carolina

26 posts
2 awards
50 influence

Apr 18 '11, 09:37 PM

Hi Crosswind,

If your home sold for more than what was owed (from foreclosure), a surplus was created.

If this was the case, then all the surplus is yours unless you have any underlying liens or judgments. If you do, then the money rightfully belongs to the creditors. If you don't, the money belongs to you because you are next in line to receive the money.

In NC, it can take up to 6 months to get the money.