The state of foreclosure in South Carolina
Owning your own home has always been part of the elusive American dream. To do so, the average person or family must finance its residential purchase through a mortgage loan taken out from a bank or similar mortgagee. If all goes as planned, the homeowner will stay employed for the long term and make a couple decades of house payments on the mortgage until the house finally belongs to him or her free of the mortgage encumbrance.
But then came the recent recession, along with its high unemployment rates and other financial woes. Unfortunately, many banks had allowed generous mortgages to borrowers, also called mortgagors, without the real fiscal means to continue payments through job loss, medical crises or similar personal disasters.
When a mortgagor is unable to continue to make its house payments, the bank may initiate a legal process according to the terms of the mortgage contract called foreclosure in which the mortgagee usually has the right to force the sale of the home to pay off the unpaid portion of the mortgage. The nationwide economic challenges have resulted in an accompanying spike in foreclosure rates, and in the Palmetto State, the picture is fairly grim.
South Carolina foreclosure numbers
Marketwire cites real estate data provider RealtyTrac’s May 2013 foreclosure report as showing that in that month, South Carolina ranked fifth in states with the highest foreclosure rates, despite being 11 percent lower than a year earlier. Specifically, about one out of every 600 South Carolina homes was in foreclosure.
Two months later in July 2013, RealtyTrac reported that things looked better with one in every 785 houses in foreclosure in the state. The five hardest-hit counties were:
- Dorchester: 1 in 433
- Berkeley: 1 in 456
- Horry: 1 in 520
- York: 1 in 581
- Richland: 1 in 635
South Carolina foreclosure laws
In South Carolina, the only type of foreclosure available to a lender is a judicial foreclosure in which a lawsuit must be filed in state court requesting a court ordered sale of the home to satisfy the outstanding amount due on the mortgage. Foreclosure suits have detailed and complex notice and other procedural requirements that must be carefully followed in order for the action to be valid.
Potential legal solutions
Any South Carolinian facing the loss of his or her home through foreclosure, whether it is only a possibility, is already in process or has already been completed should speak with an experienced attorney as early as possible for advice about available legal remedies. For example, it might be a good idea to file a federal Chapter 13 reorganization bankruptcy that would stop the state foreclosure proceedings and allow a set time for the mortgagor to make up any past due mortgage payments according to his or her means.
An alternative solution may be to present a legal defense to the foreclosure in court or to get a stay of the foreclosure sale during an appeal. In some situations, a skilled lawyer may be able to negotiate a settlement or payment plan with the bank. Even after foreclosure and a forced sale of the property, in certain circumstances the sale may be ordered set aside on grounds such as fraud, mistake or shockingly unfair price.