Property Mortgage Laws in South Carolina

In South Carolina, which is referred to as a lien theory state, the property stays as assurance on the primary loan. A mortgage is the document that is used to place the lien on the said property.

Lenders in South Carolina go through a judicial foreclosure process that is followed through the court and the final verdict on the foreclosure is announced by the court. A Circuit Court has jurisdiction over foreclosures. The sale of the property then takes place through a publicly notified sale. A complaint, along with a lis pendens, needs to be filed in the court. A document that is recorded to provide public notice about the property being foreclosed on is referred to as a lis pendens.

LEGAL INSTRUMENTS

The documents are called the mortgage; and for commercial transactions, a security agreement. There are times when the security agreement is merged with the mortgage document. To validate the primary loan and its repayment terms, which are incorporated in the note, a mortgage needs to be filed.

TIME PERIOD

A foreclosure that goes uncontested generally takes in between 150 to 180 days to come into effect; this does depend on the schedule of the court though. If the borrower files for bankruptcy or if the action is contested by the borrower and if the hearings are sought to be delayed or adjourned, the process can be stalled.

Besides the borrower receiving the notice of sale, it needs to be published in a general circulation newspaper for a minimum of three successive weeks. The notice also needs to be posted in different places within the county including the courthouse a minimum of three weeks prior to the sale.

A process referred to as an application for an order of appraisal is in place in South Carolina. If a lender seeks deficiency, a borrower can request this process wherein the property’s high value is determined by an autonomous appraiser and can be substituted for the amount that the property sold for. The appraisal right can be waived if the property in question is residential or if it is part of a consumer’s credit transaction.

RIGHT OF REDEMPTION

A statutory right of redemption where a foreclosed property can be reclaimed by the owner upon payment of the unpaid loan and costs does not exist in South Carolina.

DEFICIENCY JUDGMENT

If a property ends up selling for less than the amount on the loan that is secured by the mortgage at the public-sale, the lender can obtain a deficiency judgment. This implies that the borrower owes to the lender the difference of the original loan amount and what the property sells for at the public auction. A judgment on deficiency is subject to the above mentioned rights for appraisal.

STATUTES

Foreclosures in South Carolina are governed by laws that are part of South Carolina Code of Laws (2004) Title 29 (Mortgages and Other Liens), Chapter 3, Article 7 (Foreclosures) (Section 29-3-610 et. seq.).