Beginning on October 1, 2024, Senate Bill 319 introduced certain changes to the foreclosure sale process including changes to the statute establishing the place of sale, the authorization of remote bidding in foreclosure sales, and a change to the requirements surrounding the time of sale.
Place of Sale
The statute governing the place of sale of real property in a foreclosure sale was amended to expand the requirements for where a foreclosure sale may be held in certain circumstances. When a deed of trust either (1) gives the mortgagee or trustee the right to designate the place of sale in a foreclosure, or (2) does not designate a place of sale or give any party the right to designate the place of sale, N.C. Gen. Stat. § 45-21.4 permits that foreclosure sales may take place at any public location within the county in which the property is situated (not just at the courthouse door).
The Authorization of Remote Bidding
In a power of sale foreclosure, the trustee, or an agent of the trustee, may accept remote bids during sale from bidders who are not physically present.[1] All bids accepted at the sale must be clearly announced to all bidders, whether physically present or not. Prior to accepting a remote bid, the remote bidder is required to pay all funds required to be paid by the winning bidder, in the same manner that an in-person bidder would be required to make a deposit. However, if remote bidding is utilized, any charges incurred by the trustee in connection with the use of this bidding method are not chargeable or recoverable as costs and expenses of the foreclosure.
While the concept of remote bidding at foreclosure sales is still evolving, in 2023, New York launched a pilot project in several counties to allow remote bidding in foreclosure auctions, citing potential benefits of the program to include the possibility of higher sale prices which would benefit homeowners, and an increase in transparency, intended to address criticism by lending institutions. While still holding traditional in-person bidding at foreclosure sales in these counties, third-party auction platforms were simultaneously utilized to broaden the list of potential bidders.
Time of Sale
The statute governing the time of sale for foreclosures was amended to allow a sale of property to begin up to three hours after the time designated in the notice of sale. Previously, this statute required that the sale take place within one hour of the designated time. Importantly, an exception for delays caused by other sales that are being held at the same place remains.
[1] N.C. Gen. Stat. § 45-21.25A
