In-Rem and Mortgage Style Foreclosure Proccess

How Does In Rem Tax Foreclosure Work? (Paralegal handles this foreclosure)

N.C.G.S. 105-375

  1. Property is assigned to the Tax Collection Paralegal for foreclosure

  2. Courtesy letter sent asking taxpayer to contact our Tax Collection Paralegal to prevent foreclosure

  3. Tax Collection Paralegal works with taxpayer to collect taxes or failure to respond results in moving forward with foreclosure action

  4. Title search is completed

  5. Tax Collection Paralegal visits the property/posts Notice of Docketing Tax Foreclosure Judgment

  6. Certified Letter mailed to owner(s), lienholders, judgment creditors and any persons who may have a legal interest in the property

  7. All parcels with unclaimed letters will have a Notice of Docketing Judgment advertised in The Daily Courier for the purpose of notification

  8. Judgment for Delinquent Taxes is docketed with the Rutherford County Clerk of Court’s Office

  9. 90 days after docketing, a Request of Execution is filed with the Rutherford County Clerk of Court

  10. Order of Execution is signed by the Clerk of Court and the case is turned over to the Sheriff

  11. A sale date is scheduled

  12. Notice of Sale mailed to owner(s), lienholders, judgment creditors, and any persons who may have a legal interest in the property

  13. Notice of Sale is posted at the Rutherford County Courthouse in the Clerk of Court's Office and on the bulletin bord outside the Tax Collections office

  14. Sheriff posts a Notice of Sale at the property

  15. Notice of Sale advertised in The Daily Courier

  16. Ad listed on www.rutherfordcountync.gov website, under tax foreclosure link

  17. Revenue Department prepares an opening bid for the taxes owed (this is a total of the taxes and foreclosure costs)

  18. Auction held on the courthouse steps by a sheriff's deputy

  19. Deputy reads the notice and opens the bidding for the minimum bid amount set by the tax office

  20. Anyone present at auction may bid the minimum amount or any higher amount

  21. The high bidder on the day of auction must make a deposit of half the bid amount  (must be paid w/cash, certified funds, money order at the end of the sale)

  22. Bidding is held open for 10 days for the filing of an upset bid with the Rutherford Co. Clerk of Court’s Office

  23. All upset bids must raise the current bid by $750 or 5%, whichever is greater

  24. It is the high bidders responsibility to keep check on the status of his/her bid with the Rutherford Co. Clerk of Courts Office

  25. The Tax Collection Specialist will mail out a Notice of Upset Bid and/or call number requested, but due to USPS you may not receive said notice before the expiration of upset bidding so a current phone number on file with us is very important

  26. If your bid is upset you can request a refund of your deposit from the Clerk of Court or you can raise the most current bid

  27. Each time a new bid is placed, the upset bidding phase is extended for 10 more days

  28. At the end of 10 consecutive days w/no upset bidding, the Sheriff will request the clerk to sign an Order of Confirmation

  29. The balance of the bid is due within 10 days to the Sheriff

  30. Once funds are collected in full, the Sheriff will prepare a Sheriff’s Deed to the high bidder, it will be recorded in the Rutherford Co. Register of Deeds Office and the original deed will be forwarded to the new owner after the recording process is complete

  31.  Upon full payment of funds and the recordation of the Sheriff’s Deed, the Tax Collection Specialist will file a Cancellation of Judgment to close the case.

How Does Mortgage Style Foreclosure Work? (Attorney’s office handles this type of foreclosure)

Before referring a property to the attorney for foreclosure we exhaust all remedies available to us as collectors; for example, foreclosure warning notices sent to the taxpayer, wage garnishment, bank attachment, debt setoff, and/or payment arrangements. When none of those remedies are successful we forward to the attorney.

1. A demand letter for payment is sent to the taxpayer and any lienholders

2. A title search is done on the property

3. The complaint is filed with the Clerk of Court; this officially commences the action

4. Summons is issued and service is made on the parties by Sheriff’s deputy

5. If the parties to the summons cannot be located/served, notice of service will be advertised in The Daily Courier

6. Judgment is filed with the Rutherford County Clerk of Court requesting the sale of the property to satisfy the tax lien

7. If the defendant does not answer the judgment/fails to appear, the Rutherford County Clerk of Court will enter a judgment by default

8. If the taxpayer pays all of the taxes and fees before the conclusion of the suit, the action will be dismissed

9. Notice of sale will be advertised in The Daily Courier as well as on the website

10. A sign will be placed on the property to notify prospective bidders of the upcoming sale

11. Notice of Sale is mailed to owner(s), lienholders, judgment creditors, and any persons who may have a legal interest in the property

12. An opening bid is prepared for the taxes owed as well as any other costs, such as attorney fees and advertising fees

13. Auction is held on the courthouse steps by a trustee

14. Trustee reads the notice and opens the bidding

15. Anyone present at the auction may bid the minimum amount or a higher amount; no registration is required

16. The high bidder on the day of the auction must make a deposit of $750 or 5%, whichever is greater, and it must be paid with cash, certified funds, or money order

17. Bidding is held open for 10 days for the filing of an upset bid with the Rutherford County Clerk of Court’s Office

18. All upset bids must raise the current bid by $750 or 5%, whichever is greater

19. It is the high bidder’s responsibility to keep check on the status of his/her bid with the Rutherford County Clerk of Court’s Office

20. The Tax Collection Paralegal will mail out a Notice of Upset Bid and/or call the number requested, but due to USPS you may not receive said notice before the expiration of upset bidding so a current phone number on file with us is very important

21. If your bid is upset you can request a refund of your deposit with the Rutherford County Clerk of Court or you may raise your bid

22. Each time a new bid is placed, the upset bidding phase is extended for 10 more days

23. At the end of the upset bid period the balance of the bid is due

24. Once funds are collected in full, a deed is drafted transferring ownership into the high bidder’s name and recorded in the Rutherford County Register of Deed’s Office

25. Once the property sells, a report of sale will be filed with the clerk of court

 

Statement Regarding Tax Foreclosures

Before foreclosing on a property we pursue every method available to us as collectors, including payment plans, wage garnishments, bank garnishments, and rent attachments. We give the owner ample opportunity to keep their property from being foreclosed upon; this is neither a decision we take lightly nor one we enter into hastily. We exhaust all possible options before we make the decision to foreclose. We want to help people keep their property, but when the delinquent taxpayer fails to make an honest effort to pay their taxes we realize that it is not fair to diligent taxpayers. Property tax dollars are used for funding fire departments, local parks, libraries, restaurant inspections, police officers, public schools, and other public services we use on a daily basis, so we take nonpayment of taxes very seriously. For more information about the Rutherford County budget, the services funded by your property taxes, and links to municipal web sites, visit http://cms6.revize.com/revize/rutherfordnc/departments/finance/budget_information.php.

General Information Regarding Tax Foreclosures

Foreclosure Methods: We use two methods for foreclosure action; in-rem foreclosure is handled in our office by the paralegal and mortgage style foreclosure is handled by an outside attorney. N.C.G.S. 105-375 addresses our ability to use the in-rem method of foreclosure as well as the steps involved in the process. N.C.G.S. 105-374 addresses our ability to use the mortgage style of foreclosure as well as the steps involved in that process. This particular style is similar to how a bank foreclosure is handled.

Notice of Sale: All foreclosure sales are advertised before the sale date in a newspaper of general circulation in the county, which meets our statutory requirement to advertise in N.C.G.S. 105-369(c). Sales will be advertised in the Daily Courier for two consecutive weeks before the sale. We also post this information on our county website as an added step to notify delinquent taxpayers as well as inform interested bidders. Sale information can also be found in the Clerk of Court.

Location of Sale: Foreclosure sales are conducted on the courthouse steps by public auction at 229 N. Main St Rutherfordton, NC 28139.

Bidding On An Auctioned Property: The estimated opening bid will be set prior to the sale date and is the approximate amount required for the opening bid. We cannot accept less than the amount of taxes and costs incurred. Anyone is allowed to bid on the property, including the owner being foreclosed upon. The high bidder will deposit 50% of the high bid or $750, whichever is greater, with the Clerk of Court. Accepted forms of payment are cash or certified check. No personal checks will be accepted. We will allow a reasonable amount of time to go to the bank to obtain funds. 

Upset Bid Process: Once a high bid is on record with the Clerk of Court there is a 10 day period in which a person can upset the high bid. They must put down 5% of the high bid or $750, whichever is greater. Again, the only accepted forms of payment are cash or certified check.  Each time the high bid is upset, a new 10 day period begins. Once the bid has not been upset for 10 days the high bidder will be notified and the remainder of the bid will need to be paid to the clerk’s office.

NOTE: THIS IS A BUYER BEWARE SALE. ALL SALES ARE FINAL. WE OFFER THE PROPERTIES ON AN “AS IS” AND “WHERE IS” BASIS. THE COUNTY MAKES NO REPRESENTATION OF WARRANTY, EXPRESS OR IMPLIED. IT IS THE BUYER’S RESPONSIBILITY TO INVESTIGATE THE PROPERTY PRIOR TO BIDDING. JUDGMENTS AGAINST THE OWNER OF THE PROPERTY CAN BE CHECKED IN THE CLERK OF COURT'S OFFICE. YOU WILL NEED TO HAVE THE OWNER'S NAME TO CHECK JUDGMENTS. ANYONE CONSIDERING BUYING PROPERTY AT A TAX FORECLOSURE SALE SHOULD BE AWARE THAT THERE IS A RISK. THE COUNTY DOES NOT GUARANTEE OR PROVIDE ANY WARRANTY. WE STRONGLE RECOMMEND THAT YOU CONSULT AN ATTORNEY PRIOR TO BIDDING ON A PROPERTY.

Common Questions Regarding Foreclosures

What if the high bidder doesn’t pay? In this case the high bidder will forfeit any funds deposited with the clerk; possible civil action may be initiated, as well as prosecution for contempt for failure to honor the bid. If the next bid is less than the original winning bid, a default judgment will be entered against the defaulting bidder for the loss.

How will I know if I am outbid? Notice of upset bids will be mailed by first class mail in accordance with N.C.G.S. 1-339-64; however, we advise you to check the status of current bids regularly during the upset bid process.

Can the tax foreclosure be stopped? Yes, if the taxpayer pays all of the outstanding taxes and costs before the end of the upset bid period, they can redeem their property. We do not accept payment arrangements this late in the proceedings. As long as the taxes and fees are paid in full we will file a cancellation of judgment and the foreclosure proceedings will cease. If they fail to pay taxes and costs, and the upset bid period has ended, they lose all rights to the property and the high bidder is now the owner.

Can I pay the taxes due and acquire the property? No. We do not sell tax liens or tax certificates. Properties that are sold on the courthouse steps must go through all of the steps included in a foreclosure action. There are NO exceptions. Paying someone’s taxes doesn’t give you any rights to the property.

Do I have to wait a year before I transfer or renovate the property? No, once the high bidder pays the high bid amount we will transfer the property into their name and they will receive a Non-Warranty Sheriff’s Deed to the property.

Does the 10 day upset bid process include weekends and holidays? The day the foreclosure sale is conducted counts as day 1. Saturday and Sunday are also counted. However, if day 10 falls on the weekend or a holiday, the next working day shall be counted as day 10.

What kind of deed will I receive? You will receive a Non-Warranty Sheriff’s Deed, and in accordance with N.C.G.S. 105-375, “The purchaser at the execution sale shall acquire title to the property in fee simple free and clear of all claims, rights, interests, and liens except the liens of other taxes or special assessments not paid from the purchase price and not included in the judgment.”

What happens to property when no one raises the County’s opening bid at a foreclosure sale? If no initial or upset bid is submitted on foreclosure property, Rutherford County will be confirmed as the winning bidder on the property by the Clerk of Court, and such property may become surplus property to be sold at a later date.

How often do you have sales? Rutherford County has sales throughout the year. Properties for sale are advertised two consecutive weeks prior to the sale in the Daily Courier. Notices of sale are also posted in the Clerk of Court’s office 20 days prior to the sale.

Direct all inquires to the Tax Collection Specialist, Jennifer Whiteley, at 828-287-6181 or jennifer.whiteley@rutherfordcountync.gov