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Real Property — Mortgages – Foreclosure – Power of Sale – Lender’s Authority

In re Foreclosure of Clark (Lawyers Weekly No. 15-16-0381, 10 pp.) (Lucy Inman, J.) Appealed from Buncombe County Superior Court (Sharon Tracey Barrett, J.) N.C. App. Unpub.

Holding: Even though the deed of trust says the lender – rather than the trustee – will apply the proceeds of the foreclosure sale, and even though this provision appears to conflict with G.S. § 45-21.31, since the deed of trust also includes a severability clause, the possibility that the application-of-proceeds clause is unenforceable does not require the court to throw out the deed of trust’s explicit and unambiguous power of sale.

We affirm the trial court’s order authorizing foreclosure under a power of sale.

Pursuant to the plain language of the deed of trust, the borrowers “grant and convey the Property to the Trustee … with a power of sale….” The clauses which say the lender “shall acquire and sell the property” and shall “take action” to have the property sold merely describe the process by which the lender would direct the trustee to initiate the sale of the property. Nothing in these provisions allows for the lender to hold the power of sale; therefore, these terms do not conflict with the deed of trust’s explicit grant of the power of sale to the trustee.

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