Blog

Saturday, May 28, 2011

New North Carolina Foreclosure Decision Favors Homeowners

New North Carolina Foreclosure Decision Favors Homeowners.


A recent North Carolina Court of Appeals ruling makes it more difficult for banks to foreclose on homes in North Carolina. In this instance, the entity bringing the foreclosure action produced the original mortgage loan note at the foreclosure hearing but still had its attempt to foreclose blocked by the Court of Appeals.


In this case, ownership of the mortgage loan note had been transferred to “Deutsche Bank Trust Company Americas”. However, the entity which brought the foreclosure action was “Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans Inc. Series 2006 – QA6”. The Clerk of Court (who presides over initial foreclosure hearings) of Hyde County approved the foreclosure, and upon initial appeal the Superior Court Judge in Hyde County supported the Clerk of Court’s ruling. The homeowner then appealed to the North Carolina Court of Appeals.


The North Carolina Court of Appeals reviewed the Superior Court’s ruling and made a very significant finding: there was no proof that the party which had been allowed to move forward with foreclosure proceedings was the same entity which had allegedly been assigned proper legal ownership of the mortgage loan note. Thus, the Court of Appeals concluded that the foreclosure was improper.


The Court also noted that, although Deutsche Bank produced the original mortgage loan note at the foreclosure hearing, there was no proof that it was in possession of that original mortgage loan note at the time it filed the notices required to begin the foreclosure process.


Based on this ruling by the North Carolina Court of Appeals, homeowners faced with foreclosure should demand that the Clerk of Court and/or the Court consider whether the party moving for foreclosure can prove:



  1. that it had physical possession of the original mortgage loan note at the time the foreclosure was initiated; and

  2. that it is the exact same entity who currently owns the mortgage loan note.


If you have having issues with your mortgage loan, McGrath & Spielberger, PLLC may be able to assist you with a mortgage loan modification or foreclosure prevention.