Foreclosure Rules in South Carolina
While the purpose and effect of a foreclosure is the same everywhere in the United States, the foreclosure process is different in each state. The process in South Carolina is referred to as judicial because it takes place in a court of law and requires court approval. It requires many notices and can result in the borrower still owing the lender money after the foreclosure.
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Lis Pendes
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A foreclosure in South Carolina begins with the foreclosing lender filing a "lis pendes" -- "suit pending" in Latin. This is a type of lawsuit filed in court. Once a lis pendes is filed, no further liens can be recorded on a property. The lender asks the court for both a money judgment against the borrower as well as for an order for the property to be sold by the court and the proceeds applied toward the awarded judgment. The borrower, who is the defendant in this action, has the right to challenge the foreclosure, although he is not usually entitled to a jury trial.
Deficiency Judgment
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A deficiency judgment is a court order requiring the borrower to repay any difference between the sale price of the property and the loan balance plus fees and penalties accruing during the foreclosure process. The South Carolina lender must specifically file for a deficiency judgment in the foreclosure process.
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Foreclosure Sale
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If the court awards the lender the judgment and order of sale, the property is sold at auction by the local sheriff. If the lender has also been granted a deficiency judgment, the auction is kept open for 30 days, otherwise it occurs on one day. At the end of the 30-day period, the auction is reopen for a day and any other bidder may purchase the property for $1 more than the previous highest bid.
Notices
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The foreclosure process in South Carolina requires the lender to file and mail many notices. Because the foreclosure action is judicial, many of the notices require formal service on the borrower. The first set of notices served on the borrower are the court summons, complaint and notice of lis pendes, which give the borrower 30 days to respond. If the borrower fails to answer, the lender seeks to have the hearing scheduled and acted upon. If the borrower responds, a hearing is set, about which the borrower and lender will receive notice from the court. In this case, many further court dates may be set and associated notices required. Once the foreclosure is granted, notice of the sale must be published in a local paper once a week for three weeks. If a deficiency judgment was issued, a number of other notices are required.
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