Understanding the foreclosure process in South Carolina is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in South Carolina
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in South Carolina works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (843) 410-3050 or through our contact page to have us walk you through the specific foreclosure process here locally in Summerville.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
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Your mortgage lender must file suit in the court system.
Foreclosure typically begins when your lender files a lawsuit in court to start the foreclosure process. This formal legal action sets the stage for the rest of the procedure, and you’ll be officially notified once it begins. -
You’ll get a letter from the court demanding payment.
After the suit is filed, the court will send you a formal letter demanding payment. This letter outlines the details of the case and provides you with instructions on how to proceed in order to stop the foreclosure. -
Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
If you can bring your loan current by paying the overdue amount (and any additional fees), you may have the chance to avoid foreclosure. This usually happens within a 30-day period, but in some cases, you may request an extension or negotiate for more time. -
If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
If the payment isn’t made within the allotted time, the court will issue a judgment in favor of the lender. This means the lender has the legal right to sell your property to recover the amount owed, and this is typically done through a public auction. -
Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
After the auction and sale of the property, the new owner (or bank) will initiate the eviction process. This is usually carried out by the sheriff, who will issue an eviction notice, demanding that you vacate the property without delay. This can be an overwhelming process, but understanding the steps can help you prepare for what comes next.
Under Power of Sale (or Non-Judicial Foreclosure):
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The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
In a non-judicial foreclosure, the lender will send you a demand for payment, and the process does not typically require the involvement of a court. However, the foreclosure process may still be subject to judicial review in some states, allowing the courts to oversee certain aspects of the procedure to ensure compliance with state laws. -
After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
Once the required waiting period has passed, typically after a set number of days, a deed of trust will be drafted. This deed formally transfers control of the property from you, the homeowner, to a neutral third party called a trustee. The trustee’s job is to oversee the foreclosure process and facilitate the sale of the property. -
The trustee can then sell your property to the lender at a public auction (notice must be given).
The trustee can arrange for a public auction of your property, where it is sold to the highest bidder, which is often the lender or the bank. Before the auction, legal notice must be given to the public to ensure that the sale is transparent and that all interested parties have the opportunity to participate. -
Anyone who has an interest in the property must be notified during either type of foreclosure.
It’s important that anyone with an interest in the property, such as contractors or other creditors with liens on the home, be notified of the foreclosure proceedings. This ensures that everyone involved is aware of the situation and that any outstanding debts or claims are properly addressed. -
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
If contractors or banks have placed liens on the property due to unpaid debts, they have a legal right to receive payment from the sale proceeds at auction. This may reduce the amount that you, as the homeowner, ultimately receive, but it’s a crucial part of ensuring that all parties with a financial stake in the property are compensated before the sale is completed.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Holy City Mobile Homes to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Summerville, we can help you.
We buy mobile homes in Summerville South Carolina like yours from people who need to sell fast.
Give us a call anytime (843) 410-3050 or
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Another Foreclosure Resource For Summerville South Carolina HomeOwners: