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.
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.
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.
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