The laws governing mortgages and foreclosures can vary greatly from state to state. Foreclosure rates in North Carolina are relatively low when compared with the national average, but the state's laws are relatively unfavorable for borrowers throughout the process. North Carolina foreclosure statistics for 2009 actually went down quite a bit (about 16 percent.) There were 28,384 homes foreclosed upon last year, and North Carolina ranked eighth in the country in foreclosure rate (about 0.7 percent.) Foreclosures in North Carolina typically take about 60 days to complete though, which is shorter than many states.

North Carolina is both a deed-of-trust and two-party mortgage state, meaning that either mortgage arrangement is legal. Deed of trust loans require a third party's participation and a deed of trust, which establishes the third party as a trustee and specifies the terms under which the property is to be foreclosed. The trustee keeps possession of the deed to the property until the loan is paid in full, and if the borrower defaults the trustee is responsible for handling the foreclosure process. Traditional two-party mortgage arrangements are also allowed under state law, but are less common. In a two-party mortgage, a lender must sue the borrower successfully to recover the property upon default.

One beneficial aspect of laws governing North Carolina foreclosure homes is that third-party foreclosure sales are sometimes subject to something called the one-action rule. This rule bars the recovery of a deficiency judgment, which would usually allow the lender to recoup further money from a from a mortgagor who has defaulted after the property has been sold.

The borrower is also entitled to something called “right of redemption”. This rule, which is embraced by many states, allows the borrower to retake possession of a property by bringing the loan current and paying fees and legal costs that the lender has accrued during the foreclosure process.