Short Answer

In North Carolina, you need clear, document-based proof that the challenged deed of trust (mortgage) is invalid as to your interest—most often because you never signed it, your signature was forged, or required formalities were not met. Bring certified land records, the full closing file, notary and acknowledgment evidence, and testimony or affidavits showing non‑execution or fraud. You must also properly serve every interested party before the Clerk will decide who gets foreclosure surplus funds.

Understanding the Problem

You want to know what proof North Carolina courts and the Clerk of Superior Court expect when you claim a co-owner recorded fraudulent mortgages and you’re seeking the foreclosure surplus. The focus is: can you show, with reliable documents and testimony, that you did not sign or authorize the liens and that they shouldn’t be paid from the surplus?

Apply the Law

North Carolina’s Clerk of Superior Court distributes foreclosure surplus funds after paying valid liens in order of priority. If you allege fraud or forgery in a recorded deed of trust, that contested issue can be sent to a Superior Court judge. The court looks first at execution and recording formalities and whether you actually signed or authorized the lien. Service of process on all interested parties under Rule 4 is required before any decision on entitlement to surplus.

Key Requirements

• Execution: A lien against your ownership interest generally requires your signature; a deed without the grantor’s signature is ineffective as to that grantor.
• Recording & chain of title: Certified copies of deeds, deeds of trust, assignments, and UCC fixture filings to show what was recorded, when, and by whom.
• Proof of non‑execution or fraud: Affidavits/testimony that you did not sign; handwriting analysis; notary records; closing attorney/lender file showing who actually appeared and signed.
• Service on all parties: Proper Rule 4 service of your petition/claim on the co-owner, trustee, lender, and any competing claimants; lack of service can delay or derail surplus distribution.
• Forum and transfer: The Clerk manages surplus distribution; disputed fraud/forgery issues can be transferred to Superior Court for resolution.

What the Statutes Say

• North Carolina Gen. Stat. § 45-21.31 (Surplus after foreclosure) – Surplus paid to the clerk; claimants apply; clerk distributes after valid liens.
• North Carolina Gen. Stat. § 1-301.2 (Transfer from clerk to Superior Court) – Contested fact or equitable issues (like fraud/forgery) move to a judge.
• North Carolina Gen. Stat. § 47-17 (Conveyances must be in writing and signed) – A deed must be signed by the grantor; lack of signature is fatal.
• North Carolina Gen. Stat. § 1A-1 (Rule 4, Service of process) – Sets out acceptable methods of serving initial petitions and summonses.

Analysis

Apply the Rule to the Facts: Because your name appears on the co-signed mortgage only for “credit convenience,” the key is whether you executed the later disputed mortgages. A deed transferring your co-owner’s interest that lacks the co-owner’s signature does not convey their interest, so you should highlight that defect. Your title search and UCC findings frame the timeline; pair them with lender/closing files, notary records, and a handwriting comparison to show non‑execution or forgery. Finally, correct the earlier service defect by completing Rule 4 service on the co-owner and any lienholders before asking the Clerk to release surplus.

Process & Timing

1. Who files: The claimant to surplus (you). Where: Clerk of Superior Court in the county where the foreclosure occurred. What: A verified petition or application for disbursement of surplus and, if fraud/forgery is alleged, a separate civil action for declaratory relief/cancellation of instrument with a notice of lis pendens. When: After the trustee deposits the surplus with the Clerk; file promptly and serve all interested parties under Rule 4.
2. Serve the co-owner, trustee, lender, and any other claimants. The Clerk may set a hearing; if fraud/forgery is genuinely disputed, the matter can be transferred to a Superior Court judge for resolution.
3. After validity is decided, return to the Clerk for distribution of surplus funds according to lien priority and ownership shares; the Clerk enters a disbursement order.

Exceptions & Pitfalls

• Unrecorded agreements: A “namesake-only” understanding does not replace a signed, notarized deed; without your co-owner’s executed deed, their interest was not conveyed.
• Partial encumbrances: A co-owner can encumber only their undivided interest; a deed of trust without your signature does not lien your share.
• Service traps: You must serve the co-owner and all competing claimants under Rule 4; missed service can make any order ineffective against them.
• Notary issues: Defects in acknowledgment, notary journal gaps, or proof you were not present at signing bolster forgery claims.
• County variation: Procedures and scheduling vary by county; the Clerk may require certified land records and sworn testimony.

Talk to a Surplus Funds Attorney

If you’re facing disputed liens against your surplus and suspect a co-owner recorded fraudulent mortgages, our firm can help you gather the right evidence, fix service issues, and protect your claim. Call us today at .

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.