New North Carolina Law Eases Foreclosure Timeline

In August 2008, the Governor and Legislature of North Carolina signed as law a new bill dealing with the growing number of foreclosures. House Bill 2623 establishes the North Carolina Foreclosure Prevention Project, which requires lenders to give both homeowners and the state’s commissioner of banks at least 45 days notice before a foreclosure action is filed. During that time, the banking commissioner’s office will work with the homeowner and lender to establish an acceptable interest rate that the borrower can afford and the bank can accept. The law also gives the bank commissioner authority to extend any foreclosure filing notice by 30 days, while the state works with the homeowner and mortgage holder to come to agreement on a new loan interest rate and payments.

Nationally, the number of homeowners caught in the wave of foreclosures in October, grew 25 percent over the same month in 2007. Interestingly enough, in North Carolina, where the law requiring lenders to give borrowers an extra 45 days before filing a default notice, the total number of foreclosures actually fell 20 percent in October from last year, according to RealtyTrac, a California research firm. Locally, the Raleigh-Cary metro area saw a 26 percent decline.North Carolina, the nation’s 10th-largest state in terms of population, ranked 35th in foreclosure actions for September with 2,477. That breaks down to one in every 1,627 households. For the third quarter, the Raleigh-Cary metro market area foreclosure activity was up 18.9 percent over a year ago, but 16.7 percent lower than the second quarter this year.So basically, summarizing, in North Carolina foreclosures are up over last year but throughout 2008 the percentage has somewhat declined.

Obviously, North Carolina has not had the same experience with foreclosures as Nevada, California, Florida or Colorado. Yet North Carolina’s predatory-lending laws are shaping the national debate. North Carolina’s progressive stance dates back long before subprime had negative connotations. North Carolina passed its first comprehensive predatory lending law in 1999 and has revisited the issue several times since.The new law, signed in August, is the toughest law yet.North Carolina’s latest regulation is a model for proposals now making their way through Congress. For more information about short sales or foreclosures visit and