South Carolina Supreme Court Chief Justice Jean H. Toal this week issued an Administrative Order halting all foreclosure proceedings in the entire State of South Carolina. Court dockets and staff are overwhelmed with foreclosure filings from Spartanburg to Hilton Head. Banks and mortgage servicers are filing foreclosures as fast as they can find lawyers to draft the paperwork.
However, after nearly five years of the foreclosure and housing crisis, the number one complaint from affected homeowners is the ineptitude of the banks in communicating with and attempting to resolve mortgage issues with homeowners. Short sales are still taking five months minimum. The loan modification application and decision process can take a year or more and even then a large percentage are ultimately denied.
Facing a growing chorus of homeowners indicating the banks are foreclosing before discussing both voluntary and legally mandated alternatives to foreclosure, Justice Toal stepped in and issued his administrative order. While it doesn’t apply to all properties, just owner-occupied residences, it does require the foreclosing bank to certify it provided certain information and reviewed documentation provided by homeowners who wish to participate. The notice and review required by banks is as follows:
(a) that the Mortgagor has been served with a notice of the Mortgagor’s
right to foreclosure intervention for the purpose of seeking a resolution of the
foreclosure action by loan modification or other means of loss mitigation;
(b) that the Mortgagee, or its designated agent, has received and examined
all documents and records required to be submitted by the Mortgagor to evaluate
eligibility for foreclosure intervention;
(c) that the Mortgagor has been afforded a full and fair opportunity to
submit any other information or data pertaining to the Mortgagor’s loan or
personal circumstances for consideration by the Mortgagee;
(d) that after completion of the foreclosure intervention process, the
Mortgagor does not qualify for loan modification or other means of loss
mitigation, in accordance with any standards, rules or guidelines applicable to
the mortgage loan, and the parties have been unable to reach any other agreement
concerning the foreclosure process; and,
(e) that notice of the denial of loan modification or other means of loss
mitigation has been served on the Mortgagor by mailing such notice to all known
addresses of the Mortgagor; provided, that such notice shall also state that the
Mortgagor has 30 days from the date of mailing of notice of denial of relief to
file and serve an answer or other response to the Mortgagee’s summons and
If within thirty days after having been served with notice of the homeowners rights, the homeowner has failed, refused, or voluntarily elected not to participate in any foreclosure intervention process, the bank or lending institution, through its attorney, shall certify that fact to the Court, and the foreclosure action may proceed.
If you are underwater on your home and want to learn more about short sales and how they may help you, call us at Coastal Living Real Estate. We will be happy to discuss your situation and let you know how we can help.