Our News

Oct. 13, 2011

S.C. Foreclosure Challenges Addressed

By Kiran Krishnamurthy and Andreas Hornstein

Realtors, housing counselors and community service providers across upstate South Carolina met in Greenville to learn about resources to help homeowners facing foreclosure. With an increasing number of foreclosures in South Carolina, spurred by persistent unemployment, communities continue to struggle to find ways to help homeowners.

The Richmond Fed convened the event Aug. 17 in cooperation with the United Way of Greenville and the Greenville County Human Relations Commission.

A foreclosure can legally and financially impact homeowners in both the short- and long -term. Alternatives may include loan modifications or payment assistance through federal and state programs such as SC HELP, which uses funding available from the U.S. Department of Treasury, providing assistance to homeowners who are unemployed and behind on their mortgage payments. Homeowners may also consider short sale, deed in lieu of foreclosure or even bankruptcy, all of which have different legal and financial consequences. Resource providers at the event also provided information on legal services and consumer support to help homeowners avoid scams and fraud, find alternative housing options, and connect to counseling services and debt and credit advice.

Judge Charles Simmons discusses legal aspects of foreclosure.

Legal experts discussed changes to the state foreclosure and loan modification process, highlighting details of a 2009 foreclosure mitigation order by the South Carolina Supreme Court. The order provides homeowners with additional protections to ensure they have exhausted all of their options to avoid foreclosure, including applying for a loan modification or consideration of other resources that would assist them in saving their home. The entity filing foreclosure must inform homeowners of their right to alternative resources before foreclosure proceedings can continue.

Judge Charles Simmons of Greenville County shared foreclosure trends he experiences in the court room. He emphasized the need for service providers to inform their clients that they must participate in the process to ensure their rights are protected. Simmons said he works to educate homeowners who appear before him, ensuring that they understand the foreclosure process and realize they may have alternative options, including support from many of the agencies present at the forum.

Participants recommended the creation of a statewide foreclosure task force that would address both policy and program opportunities to help homeowners and develop a more systematic approach to sharing resources across the state. They felt that homeowners are not aware of the various free services that are available to help them, and many of the nonprofit organizations that provide these services have limited marketing and outreach resources to inform communities.

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