Businesses may wish to set up a receiver. Read here for more on this option.
If you are facing residential foreclosure, in South Carolina, right now you have options before bankruptcy and in bankruptcy.
IN BANKRUPTCY you can seek home mortgage modification under the Home Affordable Program and actions against your home are suspended by the automatic stay. However, the bankruptcy court cannot order banks to rework home mortgages, however, there is pressure from Congress on banks to work with debtors to make home mortgages more manageable. Read about Home Affordable Modification Programs here. Please aldo spend a moment at the following site. http://makinghomeaffordable.gov
WHEN YOU NEGOTIATE YOUR MORTGAGE IN BANKRUPTCY, court approval is required. Your attorney can provide the court with a consent order to modify your home mortgage that reflects an agreement between you and your bank. The court willl approve of the order if the order provides the following:
- There is no extension of additional funds beyond what is already owed;
- Payments to other lien holders under the plan will not be affected;
- The proposed modification has no detrimental effect on other creditors;
- The proposal is in the best interest of the debtor and the estate; and
- Whether payment to the creditor will continue or terminate.
BEFORE BANKRUPTCY. There are defenses and counterclaims that can slow down the foreclosure action. If income can be established during the slow down, the home can be saved. See this presentation from South Carolina Legal Services:
http://www.scconsumer.gov/licensing/credit_counseling/Foreclosures%20in%20South%20Carolina.pdf
Defenses, e.g., Failure of Notice of Default and Intent to Accelerate; No HUD Counseling Notice (National Housing Act, 12 U.S.C. 1701x(c)(5)); Failure to Comply With Statutory and Contractual Condition Precedent to Foreclosure (failure to comply with the federal regulations); Failure to Comply With Applicable Pooling and Servicing Agreement Loan Servicing Requirements (filed with the Securities and Exchange Commission); Illegal Charges Added to Balance; Failure of Good Faith and Fair Dealing; Unclean Hands / Estoppel; Failure to State a Cause of Action; Plaintiff Does Not Have Standing, Plaintiff is not a Real Party in Interest;
Additionally, South Carolina requires some banks to attempt a loan modification. See this Article for a complete discussion.
For more in-depth information see the following: 2009-05-22-01
The Home Affordable Refinance Program and the Home Affordable Modification Program offer options for home owners suffering the effects of abusive lending.
The Refinance program applies to loans owned by Freddie Mae and Fanni Mac.
Participants in the Modification program may be found by clicking here. To reduce your monthly payments you must make sure that your lender offers a reduced rate, a longer payment term, or/and a reduction in the principal.
Other important information, for example the monthly payments, interests, taxes and insurance cannot be greater than 31% of your gross monthy income; the interest rate may be reduced to 2%; the interest may be fixed permanently; the term may be extended to 40 years; and the principal may be deferred is available by clicking here.
In South Carolina Administrative Order 2009-22-01-1 will also allow an individual in foreclosure to challenge its lender’s assertion that the Home Affordable program does not require a modification in his or her foreclosure case.
Sources: ,
Katie McElveen; Richardson, Patrick; Westbrook & Brickman, LLC, Mt. Pleasant; Mark Fessler; S.C. Legal Services, Greenville, Foreclosures and Loan Modifications: Stopping the Flood After the Storm, 2 South Carolina Young Lawyer 10 (Feb. 2010). See also
http://www.freddiemac.com/news/pdf/interventions_in_mortgage_default.pdf;https://www.hmpadmin.com//portal/programs/directives.html.
Other possible remedies suggested in the South Carolina Young Lawyer: Truth in Lending Act, the Real Estate Settlement Procedures Act, the South Carolina Unfair Trade Practices Act, the South Carolina Consumer Protection Code, breach of contract and the implied coventant of good faith and fair dealing, fraudulent omissions, fraudulent concealment, etc.