When can a mortgage lender foreclose in North Carolina?
You might be diligent about paying your mortgage on time every month. But unfortunately, that won’t always protect you from foreclosure. There are instances where lenders can foreclose on a property — even when your payments are current.
Contact us to learn more about when lenders can foreclose on properties with up-to-date payments and how you could protect your home.
When can a mortgage lender foreclose?
When most people enter a mortgage arrangement, they understand that missing payments can eventually result in foreclosure on their property. However, many homeowners are unaware that other violations of the mortgage terms can also result in foreclosure.
Reasons why mortgage lenders can foreclose even when your payments are current
Missing payments aren’t the only reason a bank can take your house. If a borrower does not meet certain obligations under their loan agreement, a lender can try to take possession of the property.
Some of the common reasons for foreclosure in North Carolina include the following:
- Unpaid property taxes — A homeowner is responsible not only for paying mortgage but also property taxes on the land. Property taxes are collected by the government and can be rolled into mortgage payments or collected separately. Not paying property taxes can result in foreclosure.
- Failing to maintain homeowners insurance — Many mortgage contracts specify that the property owner is responsible for maintaining an up-to-date homeowner’s insurance policy. Not having and keeping coverage may trigger a lender to foreclose on a property.
- Mortgage payments made to the wrong bank — During the life of a mortgage loan, a loan may be bought and sold to different lenders. Or the loan servicer may change even if the holder remains the same. The mortgage lender that first issued the loan might not be the mortgage lender the homeowner is making payments to five years later. Unfortunately, mistakes and clerical errors can happen. If the current lender is not receiving payment, they could begin foreclosure proceedings.
- Failure to maintain and protect the property – A borrower is generally prohibited from destroying, damaging or impairing the property or committing waste on the property. The borrower is required to maintain the property in order to prevent the property from deteriorating or decreasing in value due to its condition.
- Providing false statements as part of a loan application – Materially false information provided during the loan underwriting process may be an incident of default on the loan.
- Past due HOA fees — Homeowners Associations (HOAs) are common. In most cases, homeowners pay dues to the HOA for the upkeep of community spaces. If a homeowner fails to make regular HOA payments, they may face foreclosure.
How to fight against foreclosure
It may be possible for a mortgage holder to foreclose on your home even if your payments are current. However, you could fight back against foreclosure and potentially save your home. A bankruptcy case filing is one option to consider.
If a mortgage lender is trying to take your home, consider contacting Sasser Law Firm to discuss your options
For over 20 years, the bankruptcy attorneys at Sasser Law Firm have helped homeowners facing foreclosure. If you are facing foreclosure, contact us by phone or online for a confidential consultation to discuss if and how we may be able to help you.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.