If you're having trouble making your mortgage payments and about go through a foreclosure in South Carolina, you should learn about the process and your rights. Federal and state laws, in theory, establish a structured, predictable foreclosure process.
But servicers and lenders sometimes make mistakes and violate the law when processing foreclosures. If the servicer or lender makes an error, you might have a defense to the foreclosure.
Read on to learn more about South Carolina foreclosure laws—from missing your first payment until you have to move out of the home—and get valuable information about federal and state laws designed to protect you during the process.
South Carolina Foreclosures are judicial, meaning a court handles the process. The lender must file a lawsuit to foreclose the home. (In some other states, though, foreclosures are nonjudicial, which means they're usually carried out with little, if any, court involvement.)
In some South Carolina counties, foreclosures go through an equity court judge, called a "master-in-equity," or through a special referee.
Here's what homeowners can expect if they stop making their mortgage payments in South Carolina.
South Carolina doesn't have a law requiring the lender to send a notice to the homeowner before filing a foreclosure lawsuit. But most mortgages contain language requiring the lender to send the homeowner a letter, typically called a "breach letter," and sometimes other notices before starting a foreclosure. Check your loan documents to find out what notices you're entitled to receive.
At least 120 days after the delinquency date (under federal foreclosure laws), and after any notice periods the mortgage requires, the servicer begins the lawsuit by filing the initial pleading, called a "complaint," with the court.
After the servicer files the complaint, it must be served on the homeowner, along with a summons. The summons tells the homeowner about the suit, where the case is filed, how to contact the lender's attorney, and that the homeowner's response (called an "answer") must be filed within 30 days after the complaint and summons are served.
If the homeowner files an answer, a foreclosure hearing will be held to determine the validity of the foreclosure. If the court determines the foreclosure is proper, it will enter a judgment against the homeowner. If the homeowner doesn't file an answer, the lender will likely get a default judgment, which means the lender wins the case.
Before the sale, the homeowner has the right to pay off the entire debt and stop the sale from happening, which is called the right of "redemption."
After judgment, a public auction of the home is scheduled. Notice of the sale must be posted in three public places in the county, including the courthouse, and published in a local newspaper once a week for three consecutive weeks before the sale.
The auction will be conducted by a master-in-equity, referee, or sheriff, depending on the county. It will usually be held at the courthouse in the county where the property is located.
The proceeds of the sale are applied to the homeowner's mortgage debt. If the proceeds exceed the total amount owed, the homeowner is entitled to the excess, assuming there aren't other liens on the property. But if the proceeds fail to satisfy the amount owed entirely, the lender may seek a deficiency judgment against the homeowner.
If the lender reserves the right to seek a deficiency judgment, bidding on the property must remain open for 30 days after the foreclosure sale. So, many lenders waive their right to a deficiency judgment to avoid this 30-day period.
Once the sale is final, either immediately after the sale, or after 30 days if a deficiency judgment is sought, the homeowner must vacate the property or face eviction.
You have specific legal rights in a foreclosure based on federal and state laws and the terms of your mortgage contract. Generally, most homeowners in South Carolina get the right to:
Your rights in a foreclosure can vary depending on your situation.
If you want to keep your home, you might qualify for a loan modification, forbearance, or repayment agreement. If you want to give up the property but not go through a foreclosure, you might be able to do a short sale or deed in lieu of foreclosure.
And if the government owns or backs your loan (for example, if you have an FHA-insured loan), you might qualify for a special loss mitigation option.
If you lose your home to a foreclosure, this information will remain on your credit reports for seven years. The foreclosure will also lower your credit scores. (What's in your credit reports affects your credit scores.)
A foreclosure will also affect your ability to purchase another home in the future. Generally, you'll have to go through a waiting period before getting another mortgage. Exactly how long you'll have to wait depends on the type of loan and your financial circumstances.
Get tips on what to do—and what not do—if you're facing a foreclosure in Foreclosure Do's and Don'ts.
Find out if foreclosures are on the rise.
If you're facing a foreclosure in South Carolina, a general understanding of the laws and process can provide you with some comfort. 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.
Remember that statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you're facing a foreclosure.
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.