August 1, 2018

by Devin Chidester
Brock & Scott, PLLC
USFN Member (North Carolina)

and Lauren S. Thurmond
Hutchens Law Firm
USFN Member (North Carolina)

On June 22, 2018 (with an effective date of July 1, 2018) Session Law 2018-40 was signed into law, amending portions of N.C.G.S. § 45-21.21. The amendments revise the procedure for postponing a foreclosure sale and set forth a new procedure for cancelling a foreclosure sale.

Postponement — Pursuant to N.C.G.S. § 45-21.21(b), the party conducting the foreclosure sale (or authorized agent or attorney) must publicly announce the postponement of the sale at the time and place the sale was originally scheduled to take place as set forth in the notice of sale, provide notice of the sale postponement to all interested parties, and attach a copy of the postponement notice to the originally posted notice of sale. The notice of sale postponement must contain language stating that the sale is postponed, the hour and date to which the sale is postponed, and the reason for the sale postponement. A copy of the notice of sale postponement must either be delivered orally or in written form to all interested parties. The amendment to N.C.G.S. § 45-21.21 now requires that the party conducting the foreclosure sale also provide notice of the sale postponement to the clerk’s office as soon as that party knows that the sale is being postponed.

Cancellation — One amendment to N.C.G.S. § 45-21.21 added a new foreclosure sale cancellation procedure that did not exist under prior law. Specifically, the party conducting the foreclosure sale must provide written notice of a sale cancellation to the clerk of superior court. The notice of cancellation must include the following information: case number; mortgagor(s) and record owner(s) name(s); USPS address or legal description; originally scheduled date and time for the sale; and a statement that the foreclosure sale has been cancelled, withdrawn, or scheduled to a new date/time. If this notice is not provided to the clerk’s office prior to the originally scheduled sale date/time, the party exercising the power of sale must do the following: publicly announce the sale cancellation at the originally scheduled sale date/time; attach the notice of sale cancellation to the originally posted notice of sale; provide written or oral notice of cancellation to the parties entitled to notice of the sale; and “hand-deliver” the notice of sale cancellation to the clerk of court.

In order to ensure compliance with the new sale cancellation requirements, servicers need to be sure that their law firms are timely notified of any pending cancellation(s) (e.g., due to approval of loss mitigation, reinstatement of the loan, or redemption).

What’s Ahead — As currently written, the amendments to N.C.G.S. § 45-21.21 contain drafting errors and may create confusion when applying the changes in practice. Errors contained in subsections (h) and (i) have been recognized by the general counsel for the Administrative Office of the Courts and are supposed to be addressed at the next legislative session (e.g., incorrect references to subsection (b) that should instead reference new subsection (g)). Local rules implemented by the clerks of court in North Carolina’s 100 counties regarding posting of notices of sale postponements and sale cancellations may change as each clerk determines how to proceed. Cancellation of a sale in real time, however, is a welcome (and needed) change.

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