Proposed opinion examines the ethical duties of a lawyer representing both the buyer and the seller on the purchase of a foreclosure property and the lawyer’s duties when the representation is limited to the seller. Editor's note: This opinion supplements and clarifies 2006 FEO 3. Inquiry #1: Bank A foreclosed its deed of trust on real property and was the highest bidder at the sale. Bank A listed the property.

Summary: The McFaddens obtained a mortgage from Flagstar in July 2007 for $116,500.00, secured by their real property located in Virginia. The note provided that it could be freely transfered by Flagstar and that the agreements in the Deed of Trust would bind and benefit successors and assignees of the note. Before August 2009, the note was transferred to Fannie Mae and around the same time the McFaddens fell delinquent on their payments.

Summary: On June 17, 2010, Waddington Ridge HOA filed a claim of lien against Dong’s residence and then filed a notice of foreclosure hearing on July 22, 2010. At that hearing, the Clerk of Court allowed the foreclosure to proceed and the sale was held on November 2, 2010, with the foreclosure deed being recorded on February 17, 2011. Dong filed a motion for relief from the foreclosure order on October 31, 2011, and the trial court ultimately concluded that Dong had not received proper notice and, pursuant to N.C. R. Civ. P.

Summary: The Mecklenburg Clerk of Court authorized a foreclosure sale on September 29, 2010. There was no appeal of that order. Nearly a year later on August 8, 2011, the homeowner brought suit alleging that the foreclosure order had been premised on fraudulent documents, that the parties initiating the foreclosure had lacked any interest in the debt and lack of notice.

Summary: The Homeowners argued that their mortgage closing was conducted by two non-attorneys, whose advice regarding their rights and obligations constituted the unauthorized practice of law under N.C.G.S. § 84-4. As such, relying on In re Foreclosure of a Deed of Trust Executed by Bradburn, 199 N.C. App. 549, 551, 681 S.E.2d 828 (2009), they argued that the contract was void and unenforceable. In Bradburn, the Court of Appeals had found that a mortgage made by a broker unlicensed under N.C.G.S.

Summary: Dorothy Vogler died testate, with her debts exceeding the value of her real and personal property. Chris Vogler, the executor of her estate, initiated a special proceeding for the purpose of obtaining authorization to sell the real estate that Ms. Vogler had owned at the time of her death and to use the proceeds to pay her debts. Such sale was authorized and subsequently confirmed on January 12, 2011, with the Clerk authorizing payment of the costs of the proceeding and the remaining balance on the mortgage owed to Bank of America (“BOA”) on the real property.

Summary: The Debtor filed his 3rd bankruptcy within 12 -months four days after the upset period in the foreclosure had expired.

Summary: At the foreclosure hearing before the New Hanover County Clerk of Court, the Pughes filed an Election of Arbitration.  The Clerk of Court did not act on this, instead finding that the Substitute Trustee had meet the six statutory requirements to proceed with foreclosure.  The Pughes appealed to Superior Court, where the judge again found that the requirements for foreclosure had been met and declined to rule on the request for arbitration. The Court of Appeals affirmed, finding that both the Clerk of Court and, on appeal, the Superior Court had scope only

Summary: The Debtor’s house was sold at a foreclosure auction for $100,000, with Blue Ridge, the mortgage holder, the highest bidder.  Blue Ridge then sold the house at a private sale five months later for $110,000.  Blue Ridge subsequently sued the Debtors for the outstanding balance on the note, roughly $30,000.  The Debtors argued that Blue Ridge violated N.C.G.S.

Summary: The Male Debtor executed a promissory note in favor of Option One Mortgage, the predecessor to Wells Fargo, and at the same time both Debtors executed a Deed of Trust.  Subsequently, the Male Debtor defaulted on the note and the property was sold at foreclosure.  A Substitute Trustee’s Deed was then recorded, conveying the property to Wells Fargo. Later, the Clerk of Court was informed that the Notice of Sale had not been included in the foreclosure file and Clerk set aside the foreclosure sale.  Wells Fargo then transferred the property to Male Debto