Some states, including South Carolina, have taken steps to help homeowners explore ways to avoid foreclosure. On May 2, 2011, the South Carolina Supreme Court issued an Administrative Order creating a foreclosure intervention process. Foreclosure intervention is a process to ensure that lenders and eligible homeowners have the chance to have a meaningful discussion about possible settlement options, like a loan modification, short sale, or deed in lieu of foreclosure. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do's and Don'ts).
Read on to learn more about how South Carolina’s foreclosure intervention process works and how you might be able to benefit from participating in the process.
Foreclosures in South Carolina are judicial, which means the lender files a lawsuit in state court in order to foreclose the home. The lender serves the borrower a summons and complaint, and the borrower gets 30 days to file an answer (a response) with the court. (See Rule 12 of the South Carolina Rules of Procedure.) (To learn about specific foreclosure laws in South Carolina, see South Carolina Foreclosure Laws and Procedures.)
The goal of South Carolina's foreclosure intervention process is to make sure that homeowners can explore options to avoid a foreclosure, such as a loan modification, forbearance agreement, repayment plan, short sale, or deed in lieu of foreclosure. (To get information about each of these options, see Avoiding Foreclosure: Basic Workout Options.)
The South Carolina foreclosure intervention process is very similar to a typical loan workout process (called“loss mitigation” in the mortgage industry). That is, the borrower submits an application and the lender determines whether the borrower qualifies for an alternative to foreclosure.
You can use the South Carolina foreclosure intervention process if:
You also have to meet other qualifications listed in the Administrative Order.
The lender’s attorney must provide you with a notice of your right to foreclosure intervention along with the foreclosure summons and complaint. You then get 30 days to request foreclosure intervention. If you don't make the request, the foreclosure goes forward.
If you participate in foreclosure intervention, the lender or servicer must postpone the foreclosure action until you complete the process. Specifically, a foreclosure hearing or sale cannot take place until the lender’s attorney certifies to the court that:
A court that is overseeing a foreclosure action may require that the parties participate in mediation.
The goal of mediation is to help the homeowner and lender come to an agreement that avoids foreclosure. The following parties participate in the mediation:
At the mediation, the parties discuss the borrower's financial situation and try to find a way for the homeowner to either keep the home or else give up the home without going through a foreclosure.
Foreclosure intervention and mediation don't guarantee that you’ll avoid foreclosure, but it doesn’t hurt to participate. You might get a loan modification that makes your mortgage payment more affordable or you might qualify for a loss mitigation option that you hadn’t previously considered. For more information about foreclosure intervention in South Carolina, read The Supreme Court of South Carolina’s FAQ about foreclosures.
If you’re facing a foreclosure in South Carolina and want to read South Carolina’s foreclosure laws for yourself, go to Title 29, Chapter 3, Article 7; Title 15, Chapter 39, Article 5; and Title 15, Chapter 29 of the South Carolina Code of Laws, which provide many of the procedural requirements for foreclosures. (To learn how to look up foreclosure laws, see How to Look Up the Foreclosure Laws in Your State).
If you need help understanding the law, want to file an answer to the foreclosure suit, or have questions about your particular circumstances, consider contacting a local foreclosure attorney. Homeowners facing foreclosure are also encouraged to contact a HUD-approved housing counselor.