Come May 9th, it’s going to be a lot more difficult to foreclose on homeowners in South Carolina.
Yesterday, the South Carolina Supreme Court announced a new mediation program that will require lenders to explore loss mitigation alternatives before foreclosing on a homeowner in an owner-occupied residence.
The rule applies to both homes already in the foreclosure process and those that may hold the distinction in the future.
Essentially, no foreclosure hearing or foreclosure sale may be held until the mortgage lender or loan servicer examines all documents and records to evaluate borrower eligibility for foreclosure intervention.
If it’s determined that foreclosure is the only way forward, a notice must be sent to the homeowner, who will then have 30 days to respond.
Assuming the borrower fails to respond, the foreclosure action may proceed.
Chief Justice Jean H. Total noted in an administrative order that the rule was being imposed after numerous reports of loss mitigation breakdowns between lenders and borrowers.
“Since imposition of my prior order, the number of foreclosure actions filed in this State have continued to increase,” she said in a statement.
“As a result, the number of unresolved foreclosure actions has increased, with a resulting burden on the resources of the Court before which the action is pending.”
The big question, as with any foreclosure legislation, is whether this will lead to any meaningful change, or simply delay an already backed-up process.