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South Carolina currently ranks 20th in total number of foreclosures, and 15th in the rate of foreclosures. The rate of foreclosures compares the number of housing units in the state by the number of foreclosures. In South Carolina one in every 506 houses was in some stage of the foreclosure process in May 2010. Charleston and Dorchester counties lead South Carolina’s league of total foreclosures and rate of foreclosure respectively. Dorchester is especially worrying; one in every 190 house has received a foreclosure filing.
This series of articles on South Carolina will provide help on how to avoid foreclosure and delinquency. An important step in foreclosure avoidance is to understand the foreclosure laws of your state. Each State has different foreclosure laws and procedures. Understanding South Carolina’s specific foreclosure laws can help you decide what steps to take, and use the system to your advantage.
South Carolina has a judicial foreclosure process. This means all foreclosures must be heard in court and decided upon by a Judge. The lender must file a complaint or lawsuit against the borrower to get a decree of sale from the court where the property is located. A decree of sale allows the lender to repossess the property and sell it in auction.
Once a foreclosure complaint is filed the court will study the case. If the court confirms the borrower is in default he or she is given a period of time to cover the late payments plus any reasonable fees incurred in the foreclosure process. Once the set period of time ends and the borrower is still in default the court will approve a foreclosure sale.
The procedure for a foreclosure sale is very specific. First the lender must post a notice of sale at the courthouse door and two other places for a minimum of three weeks before the sale. The notice must also be printed in a general circulation newspaper where the house is located for the same period of time. Second, the sale will be carried out at the local courthouse where the house is located. Foreclosure sales must be conducted on the first Monday of the month, and postponed to the next Tuesday if Monday falls on a holiday. The auction sale must be scheduled between eleven in the morning to five in the afternoon; although the Sheriff can close the bidding before if necessary. This does not mean the auction has closed. In South Carolina the auction remains open for thirty days after the foreclosure’s public sale. After this period the highest bidder is granted ownership on the property if the court has no objection on the price of the sale.
Unfortunately the problems don’t always stop here for borrowers. South Carolina allows for deficiency judgments against borrowers whose mortgage balances are higher than the price obtained at a foreclosure auction. A deficiency judgment holds borrowers liable for the difference between the mortgage balance and the property’s sale price. However, state laws allow a borrower to ask the court for a market appraisal (i.e. value) of the foreclosure. The court will then consider the appraisal price, not the sale price the amount from which to calculate a deficiency judgment.
What can borrowers in South Carolina do to avoid getting to this stage? The following post in this series will look at steps South Carolina borrowers can take to protect their home from foreclosure.
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