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Understanding the Steps of Foreclosure

Posted on October 1st, 2013

The process of foreclosure can seem like a hectic, rushed process where debtors are

uninformed and discriminated against. While the foreclosure process may seem like the quick

opportunity for lenders to turn properties and collect assets, it is a process that can take up to 9

months. Below are several of the stages of a foreclosure process in South Carolina.


1) Missed Payment Notices

The first stage is the receipt of missed payment notices. Most lenders provide a ten-day

grace period in processing monthly mortgage payments. However, receipt of payment

after the due date but within this grace period entitles the lender to add late fees which are

counterproductive to paying off your mortgage. In addition, late fees on mortgage payments

negatively affect the payment history component of your credit score and consequently lower

your overall credit score.


2) Notice of Default and Foreclosure

The next stage of foreclosure is the Notice of Default. Depending on the case, lenders can give

Notice of Default (NOD) statements as early as 30 days after a missed payment, however NODs

are generally sent after 3-6 months of delinquent payment. The NOD sets the final date to pay

off the entire balance of the mortgage and any additional late payments.


4) Summons and Complaint

South Carolina is a judicial foreclosure state. This means that a Notice and a Hearing in

court are required prior to the foreclosure sale. To initiate this process, the lender will

file a Summons and Complaint in the County in which the subject property is located. The

Summons and Complaint have to be served on the borrower. This means that the Summons

and Complaint must be either: 1) Given directly to the borrower; 2) Mailed to the borrower via

certified mail with a return receipt requested; 3) Left at the borrower’s usual place of residence

with someone more than 14 years of age; or 4) Served by publication in a local newspaper.


5) Period to Answer and the Importance of the Answer

The borrower has 30 days from the date of service of the Complaint to file her answer with

the Court. The importance of filing an Answer cannot be overstated. If the borrower fails to

file an Answer, the lender can move for a Default Judgment. The entry of a Default Judgment

allows the lender to foreclose based on nothing more than the borrower’s failure to answer

the Complaint. The entry of Default Judgment accelerates the foreclosure hearing process

(discussed later), which is the borrower’s only opportunity to be heard by the Court.


6) Discovery

If the Answer is timely filed, the Discovery process is commenced. Discovery is the legal

mechanism in which each side requests and produces to the opposing side any and all evidence

which it will use to prove its case to the Court. This includes, but is not limited to, testimony

from witnesses, documents, records, etc. The Discovery process is important in proving key

elements of the borrower’s case. For instance, the borrower may believe that the lender has

failed to credit her account with payments made.


7) Foreclosure Hearing

After the Answer is filed, the Court will set a date for the Foreclosure Hearing. This hearing is

typically held within 60 days after the Answer is filed. The Foreclosure Hearing is conducted

by a “Master in Equity” or a “Special Referee” depending on the County where the property

is located. At this hearing, the borrower and lender are given an opportunity to be heard.

Evidence may be presented at this hearing. At the conclusion of this hearing, the presiding

judge may enter a Judgment of Foreclosure or request the parties draft a memorandum about

the law and facts of the case. If, at the hearing or after reading the parties’ memoranda, the

Judge decides the borrower is behind and a foreclosure is appropriate, he will enter a Judgment

of Foreclosure. The borrower has 30 days after the Judgment of Foreclosure to appeal the



8) Notice of Sale

After the Judgment of Foreclosure is entered, a sale date will be set. On this sale date, the

property will be sold by the judge at an auction conducted by the Court. The property will

be advertised in an appropriate newspaper once a week, for the three weeks immediately

preceding the sale.


9) Foreclosure Sale

The property is sold by the Court on the first Monday of the month following the

aforementioned 3 week period of advertisement. The property will be sold to the highest

bidder on the day of the sale, which is typically the bank who holds the mortgage. Immediately

following the sale, unless a deficiency is demanded by the Lender, the property must be

vacated by the borrower. If a deficiency judgment is demanded by the Lender, the sale remains

open for 30 days following the sale, after which the borrower must vacate the property.


10) Deficiency

A very important aspect of the foreclosure process is whether a Deficiency Judgment is

demanded. A Deficiency Judgment is a judgment entered personally against the borrower

which makes her liable to the lender for the amount owed to the lender if the home is sold

by the Court for less than the amount owed on the mortgage. If the Lender has demanded a

Deficiency Judgment, then the sale is held open for an additional 30 days. During this 30 day

period anyone can bid except for the winner of the initial sale. If there are no additional bids

during this 30 day period, the property will be sold to the highest bidder at the initial sale.


Need help?

Foreclosure can be a stressful and confusing process for individuals to go through. At Skinner

Law Firm we know the best way to deal with the foreclosure process is to be proactive. Waiting

to be served with a foreclosure complaint before taking any action only adds to the stress. If

your financial situation has created an inability to pay your mortgage or other debts, you should

seek help from an attorney immediately to maximize your chances of keeping your house and

other property.