South Carolina foreclosure: court process, timeline, your rights

Judicial or non-judicial

Judicial, in practice. The mortgage statute treats the borrower as the owner and the lender as the holder of a debt, and says the lender may recover “by foreclosure and sale according to law” (§ 29-3-10). Section 29-3-630 then says a sale under a power of sale in a mortgage passes title only if the debt was first established by a court judgment, or the borrower consented in writing to the amount after the debt matured. The consent must be recorded and dated within twelve months before the sale (§ 29-3-640). The statutes read for this article give no other route to a sale.

In a county with a master-in-equity, the master makes the court-ordered sales; counties without one may use a referee (§ 15-39-630, § 15-39-635). The court may enter judgment for the debt and order the sale at the same time (§ 29-3-650).

An “abandoned” property can move faster. A lender may ask for an expedited judgment if the home is unoccupied and at least two listed conditions exist, such as boarded windows, utility shut-offs of at least 30 days, or an uncorrected code violation. The lender must prove it by clear and convincing evidence, and the court will not expedite if the borrower files an objection that gives cause to stop it (§ 29-3-625).

Timeline step by step

The statutes read set no total number of months from first missed payment to sale.

Right of redemption

The statutes read for this article give the borrower no separate right to buy the property back after the sale. Instead, South Carolina keeps the bidding open. Under § 15-39-720, the sale is not closed on the day it is held: for 30 days, excluding the day of sale, any person other than the high bidder may raise the bid by meeting the terms of sale and making any deposit. At 11:00 a.m. on the thirtieth day the officer reopens the bidding and sells the property to the highest bidder. The lender must enter its bid at the sale and may not bid again later.

The 30-day period does not apply if the lender’s complaint waives any deficiency judgment (§ 15-39-760); the advertisement must then say so.

Deficiency judgments

A court may order the borrower to pay “any residue of the mortgage debt that may remain unsatisfied after a sale” when the borrower is personally liable (§ 29-3-660). A lender that buys the property at the sale does not lose the balance by doing so (§ 29-3-670).

South Carolina gives the borrower a check on the sale price. A defendant against whom a personal judgment is taken or asked may, within 30 days after the sale, petition the clerk for an appraisal by three disinterested appraisers (§ 29-3-680, § 29-3-700). The court-approved value replaces the high bid when the deficiency is calculated, and if that value minus the sale price covers the deficiency, the judgment is extinguished (§ 29-3-740). A lender may obtain a waiver of this right in some commercial deals, but not in a foreclosure on a dwelling place or a consumer credit transaction (§ 29-3-680(B)).

Example, with made-up numbers: a loan balance of $250,000 plus costs of $10,000, and a high bid of $180,000. The deficiency is $80,000. If the appraisers return a value of $200,000, the value minus the bid is $20,000, so the deficiency drops to $60,000 (§ 29-3-740). The exact credits are for the court to compute.

Help for homeowners in default

• Call the servicer first. Federal rules give a borrower who submits a complete loss mitigation application more than 37 days before a sale a right to a written decision and, for loan modification denials, an appeal (12 CFR § 1024.41).
• South Carolina’s old mediation rules are gone. On May 17, 2023, the state Supreme Court rescinded its 2009 and 2011 foreclosure orders, which had required notice of foreclosure intervention rights, because the federal HAMP program ended. Judges and masters may still ask about loss mitigation before a final hearing or sale, and lenders’ lawyers remain the point of contact for loss mitigation.
• SC Housing. Borrowers with an SC Housing loan can call 800.476.0412 and choose option 5 for loss mitigation. SC Housing also lists free HUD-approved counselors across the state, including Greenville.
• Free counseling. The NeighborWorks hotline at 888.995.HOPE (4673) is staffed 24 hours a day, according to SC Housing. The CFPB site has a search for HUD-approved housing counselors.
• Buying at a sale? Foreclosure sales are exempt from the state seller disclosure form (§ 27-50-30). See seller disclosure and real estate attorneys.