North Carolina: New law can prevent rush to foreclosure

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Homeowners will get a little more breathing room before a possible foreclosure under a bill signed into law by Gov. Beverly Perdue on Wednesday.

The legislation requires a court clerk to determine whether a mortgage holder has been able to talk to the lender about working out a way to pay the loan. Mortgages are sold and resold so often that it can be time-consuming to identify the lender and reach a decision-maker with that company. The clerk must also determine whether the lender has given the mortgage holder sufficient notice before trying to foreclose. The clerk can impose a 60-day waiting period before a foreclosure can proceed.

"This legislation allows time for loan modifications," said Attorney General Roy Cooper, who attended the bill signing in the Capitol.

Perdue said the legislation, which also sets new rules for debt collectors, protects both homeowners and North Carolina's economy because of the ripple effect of foreclosure.

"It's bad for families. It's hard on the communities," Perdue said. "It's bad for businesses."