Real Property Foreclosure Procedures – (Appointment of Substitute Trustee.)

B.Appointment of Substitute Trustee.

The trustee named in the deed of trust carries out the foreclosure action.  While the original trustee named in the deed of trust may institute the foreclosure, the lender will generally appoint an individual, firm, or company that is experienced in foreclosure matters to be substituted in place of the original trustee.  This is accomplished by the execution of a written document properly recorded in the county where the real property collateral is located.  N.C.G.S. § 45-10 and 11.  A trustee may be substituted in the place of another as often as justifiable by the holder of the indebtedness secured by the deed of trust.  N.C.G.S. § 45-17.  The substitute trustee must be appointed prior to filing and serving the Notice of Hearing to commence the foreclosure action.  A failure to record the Appointment of Substitute Trustee before the Notice of Hearing would create a defective foreclosure, because the foreclosure action was initiated without authority to do so.

If the lender is a corporation, the appropriate officer must execute the Appointment of Substitute Trustee.  This instrument must be executed by its chairman, president, chief financial officer, vice president, assistant vice president, treasurer, or chief financial officer to be valid.  N.C.G.S. § 47-18.3(a).  If the lender insists on another officer or agent of the company executing the substitution of trustee instruments, then the lender must attach a corporate resolution to the instrument that authorizes the individual to execute it.  N.C.G.S. § 45-18.3(e).  If the lender is a Limited Liability Company, a Manager must execute the Appointment of Substitute Trustee.

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Maitin Law Firm, PLLC handles legal matters in the following practice areas: Residential Real Estate, Foreclosures, Creditor's Rights, Landlord/Tenant and Collections. We strive to provide the highest quality legal services while meeting the needs and exceeding the expectations of our clients. Our clients range from individuals, to small businesses, to large lending institutions.

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