§ 45-21.16. Notice and hearing.
Part 2. Procedure for Sale.
§ 45‑21.16. Notice andhearing.
(a) The mortgagee ortrustee granted a power of sale under a mortgage or deed of trust who seeks toexercise such power of sale shall file with the clerk of court a notice ofhearing in accordance with the terms of this section. After the notice ofhearing is filed, the notice of hearing shall be served upon each partyentitled to notice under this section. The notice shall specify a time andplace for the hearing before the clerk of court and shall be served not lessthan 10 days prior to the date of such hearing. The notice shall be served andproof of service shall be made in any manner provided by the Rules of CivilProcedure for service of summons, including service by registered mail or certifiedmail, return receipt requested. However, in those instances that publicationwould be authorized, service may be made by posting a notice in a conspicuousplace and manner upon the property not less than 20 days prior to the date ofthe hearing, and if service upon a party cannot be effected after a reasonableand diligent effort in a manner authorized above, notice to such party may begiven by posting the notice in a conspicuous place and manner upon the propertynot less than 20 days prior to the date of hearing. Service by posting may runconcurrently with any other effort to effect service. The notice shall beposted by the sheriff. In the event that the service is obtained by posting, anaffidavit shall be filed with the clerk of court showing the circumstanceswarranting the use of service by posting.
If any party is not served oris not timely served prior to the date of the hearing, the clerk shall orderthe hearing continued to a date and time certain, not less than 10 days fromthe date scheduled for the original hearing. All notices already timely servedremain effective. The mortgagee or trustee shall satisfy the notice requirementof this section with respect to those parties not served or not timely servedwith respect to the original hearing. Any party timely served, who has notreceived actual notice of the date to which the hearing has been continued,shall be sent the order of continuance by first‑class mail at his lastknown address.
(b) Notice of hearingshall be served in a manner authorized in subsection (a) upon:
(1) Any person to whomthe security interest instrument itself directs notice to be sent in case ofdefault.
(2) Any person obligatedto repay the indebtedness against whom the holder thereof intends to assertliability therefor, and any such person not notified shall not be liable forany deficiency remaining after the sale.
(3) Every record ownerof the real estate whose interest is of record in the county where the realproperty is located at the time the notice of hearing is filed in that county.The term "record owner" means any person owning a present or futureinterest in the real property, which interest is of record at the time that thenotice of hearing is filed and would be affected by the foreclosure proceeding,but does not mean or include the trustee in a deed of trust or the owner orholder of a mortgage, deed of trust, judgment, mechanic's or materialman'slien, or other lien or security interest in the real property. Tenants inpossession under unrecorded leases or rental agreements shall not be consideredrecord owners.
(c) Notice shall be inwriting and shall state in a manner reasonably calculated to make the partyentitled to notice aware of the following:
(1) The particular realestate security interest being foreclosed, with such a description as isnecessary to identify the real property, including the date, original amount,original holder, and book and page of the security instrument.
(2) The name and addressof the holder of the security instrument at the time that the notice of hearingis filed.
(3) The nature of thedefault claimed.
(4) The fact, if such bethe case, that the secured creditor has accelerated the maturity of the debt.
(5) Any right of thedebtor to pay the indebtedness or cure the default if such is permitted.
(5a) The holder hasconfirmed in writing to the person giving the notice, or if the holder isgiving the notice, the holder shall confirm in the notice, that, within 30 daysof the date of the notice, the debtor was sent by first‑class mail at thedebtor's last known address a detailed written statement of the amount ofprincipal, interest, and any other fees, expenses, and disbursements that theholder in good faith is claiming to be due as of the date of the writtenstatement, together with a daily interest charge based on the contract rate asof the date of the written statement. Nothing herein is intended to authorizeany fees, charges, or methods of charging interest which is not otherwisepermitted under contract between the parties and other applicable law.
(5b) To the knowledge ofthe holder, or the servicer acting on the holder's behalf, whether in the twoyears preceding the date of the statement any requests for information havebeen made by the borrower to the servicer pursuant to G.S. 45‑93 and, ifso, whether such requests have been complied with. If the time limits set forthin G.S. 45‑93 for complying with any such requests for information havenot yet expired as of the date of the notice, the notice shall so state. If theholder is not giving the notice, the holder shall confirm in writing to theperson giving the notice the information required by this subsection to bestated in the notice.
(6) Repealed by SessionLaws 1977, c. 359, s. 7.
(7) The right of thedebtor (or other party served) to appear before the clerk of court at a timeand on a date specified, at which appearance he shall be afforded theopportunity to show cause as to why the foreclosure should not be allowed to beheld. The notice shall contain all of the following:
a. A statement that ifthe debtor does not intend to contest the creditor's allegations of default,the debtor does not have to appear at the hearing and that the debtor's failureto attend the hearing will not affect the debtor's right to pay theindebtedness and thereby prevent the proposed sale, or to attend the actualsale, should the debtor elect to do so.
b. A statement that thetrustee, or substitute trustee, is a neutral party and, while holding thatposition in the foreclosure proceeding, may not advocate for the securedcreditor or for the debtor in the foreclosure proceeding.
c. A statement that thedebtor has the right to apply to a judge of the superior court pursuant to G.S.45‑21.34 to enjoin the sale, upon any legal or equitable ground that thecourt may deem sufficient prior to the time that the rights of the parties tothe sale or resale become fixed, provided that the debtor complies with therequirements of G.S. 45‑21.34.
d. A statement that thedebtor has the right to appear at the hearing and contest the evidence that theclerk is to consider under G.S. 45‑21.16(d), and that to authorize theforeclosure the clerk must find the existence of: (i) valid debt of which theparty seeking to foreclose is the holder, (ii) default, (iii) right toforeclose under the instrument, and (iv) notice to those entitled to notice.
e. A statement that ifthe debtor fails to appear at the hearing, the trustee will ask the clerk foran order to sell the real property being foreclosed.
f. A statement thatthe debtor has the right to seek the advice of an attorney and that free legalservices may be available to the debtor by contacting Legal Aid of NorthCarolina or other legal services organizations.
(8) That if theforeclosure sale is consummated, the purchaser will be entitled to possessionof the real estate as of the date of delivery of his deed, and that the debtor,if still in possession, can then be evicted.
(8a) The name, address,and telephone number of the trustee or mortgagee.
(9) That the debtorshould keep the trustee or mortgagee notified in writing of his address so thathe can be mailed copies of the notice of foreclosure setting forth the termsunder which the sale will be held, and notice of any postponements or resales.
(10) If the notice ofhearing is intended to serve also as a notice of sale, such additionalinformation as is set forth in G.S. 45‑21.16A.
(11) That the hearing maybe held on a date later than that stated in the notice and that the party willbe notified of any change in the hearing date.
(c1) The person givingthe notice of hearing, if other than the holder, may rely on the writtenconfirmation received from the holder under subdivisions (c)(5a) and (c)(5b) ofthis section and is not liable for inaccuracies in the written confirmation.
(c2) (Expires October31, 2010) In any foreclosure filed on or after November 15, 2008, where theunderlying mortgage debt is a subprime loan as defined in G.S. 45‑101(4),the notice required by subsection (b) of this section shall contain acertification by the filing party that the pre‑foreclosure notice andinformation required by G.S. 45‑102 and G.S. 45‑103 were providedin all material respects and that the periods of time established by Article 11of this Chapter have elapsed.
(d) (Effective untilOctober 31, 2010) The hearing provided by this section shall be held beforethe clerk of court in the county where the land, or any portion thereof, issituated. In the event that the property to be sold consists of separate tractssituated in different counties or a single tract in more than one county, onlyone hearing shall be necessary. However, prior to that hearing, the mortgageeor trustee shall file the notice of hearing in any other county where anyportion of the property to be sold is located. Upon such hearing, the clerkshall consider the evidence of the parties and may consider, in addition toother forms of evidence required or permitted by law, affidavits and certifiedcopies of documents. If the clerk finds the existence of (i) valid debt ofwhich the party seeking to foreclose is the holder, (ii) default, (iii) rightto foreclose under the instrument, (iv) notice to those entitled to such undersubsection (b), and (v) that the underlying mortgage debt is not a subprime loanas defined in G.S. 45‑101(4), or if the loan is a subprime loan underG.S. 45‑101(4), that the pre‑foreclosure notice under G.S. 45‑102was provided in all material respects, and that the periods of time establishedby Article 11 of this Chapter have elapsed, then the clerk shall authorize themortgagee or trustee to proceed under the instrument, and the mortgagee ortrustee can give notice of and conduct a sale pursuant to the provisions ofthis Article. A certified copy of any authorization or order by the clerk shallbe filed in any other county where any portion of the property to be sold islocated before the mortgagee or trustee may proceed to advertise and sell anyproperty located in that county. In the event that sales are to be held in morethan one county, the provisions of G.S. 45‑21.7 apply.
(d) (EffectiveOctober 31, 2010) The hearing provided by this section shall be held beforethe clerk of court in the county where the land, or any portion thereof, issituated. In the event that the property to be sold consists of separate tractssituated in different counties or a single tract in more than one county, onlyone hearing shall be necessary. However, prior to that hearing, the mortgageeor trustee shall file the notice of hearing in any other county where anyportion of the property to be sold is located. Upon such hearing, the clerkshall consider the evidence of the parties and may consider, in addition toother forms of evidence required or permitted by law, affidavits and certifiedcopies of documents. If the clerk finds the existence of (i) valid debt ofwhich the party seeking to foreclose is the holder, (ii) default, (iii) rightto foreclose under the instrument, and (iv) notice to those entitled to suchunder subsection (b), then the clerk shall authorize the mortgagee or trusteeto proceed under the instrument, and the mortgagee or trustee can give noticeof and conduct a sale pursuant to the provisions of this Article. A certifiedcopy of any authorization or order by the clerk shall be filed in any othercounty where any portion of the property to be sold is located before themortgagee or trustee may proceed to advertise and sell any property located inthat county. In the event that sales are to be held in more than one county,the provisions of G.S. 45‑21.7 apply.
(d1) The act of the clerkin so finding or refusing to so find is a judicial act and may be appealed tothe judge of the district or superior court having jurisdiction at any timewithin 10 days after said act. Appeals from said act of the clerk shall beheard de novo. If an appeal is taken from the clerk's findings, the appealingparty shall post a bond with sufficient surety as the clerk deems adequate toprotect the opposing party from any probable loss by reason of appeal; and uponposting of the bond the clerk shall stay the foreclosure pending appeal. If theappealing party owns and occupies the property to be sold as his or herprincipal residence, the clerk shall require a bond in the amount of onepercent (1%) of the principal balance due on the note or debt instrument,provided that the clerk, in the clerk's discretion, may require a lesser amountin cases of undue hardship or for other good cause shown; and further providedthat the clerk, in the clerk's discretion, may require a higher bond if thereis a likelihood of waste or damage to the property during the pendency of theappeal or for other good cause shown.
(e) In the event of anappeal, either party may demand that the matter be heard at the next succeedingterm of the court to which the appeal is taken which convenes 10 or more daysafter the hearing before the clerk, and such hearing shall take precedence overthe trial of other cases except cases of exceptions to homesteads and appealsin summary ejectment actions, provided the presiding judge may in hisdiscretion postpone such hearing if the rights of the parties or the public inany other pending case require that such case be heard first. In those countieswhere no session of court is scheduled within 30 days from the date of hearingbefore the clerk, either party may petition any regular or special superiorcourt judge resident in a district or assigned to hold courts in a districtwhere any part of the real estate is located, or the chief district judge of adistrict where any part of the real estate is located, who shall be authorizedto hear the appeal. A certified copy of any order entered as a result of theappeal shall be filed in all counties where the notice of hearing has beenfiled.
(f) Waiver of theright to notice and hearing provided herein shall not be permitted except asset forth herein. In any case in which the original principal amount ofindebtedness secured was one hundred thousand dollars ($100,000), or more, anyperson entitled to notice and hearing may waive after default the right tonotice and hearing by written instrument signed and duly acknowledged by suchparty. In all other cases, at any time subsequent to service of the notice ofhearing provided above, the clerk, upon the request of the mortgagee ortrustee, shall mail to all other parties entitled to notice of such hearing aform by which such parties may waive their rights to the hearing. Upon thereturn of the forms to the clerk bearing the signatures of each such party andthat of a witness to each such party's signature (which witness shall not be anagent or employee of the mortgagee or trustee), the clerk in his discretion maydispense with the necessity of a hearing and proceed to issue the orderauthorizing sale as set forth above.
(g) Any notice, order,or other papers required by this Article to be filed in the office of the clerkof superior court shall be filed in the same manner as a special proceeding. (1975, c. 492, s. 2; 1977,c. 359, ss. 2‑10; 1983, c. 335, s. 1; 1983 (Reg. Sess., 1984), c. 1108,ss. 1, 2; 1993, c. 305, s. 8; 1995, c. 509, s. 135.1(g); 1999‑137, ss. 1,2; 2007‑351, s. 4; 2008‑226, ss. 2, 3; 2009‑573, s. 2.)