Banking Law
South Carolina Supreme Court Temporarily Bars Foreclosures
Posted May 6, 2009, 08:53 am CST
By Debra Cassens Weiss
The South Carolina Supreme Court has temporarily barred some foreclosures in the state to give homeowners more time to seek loan modifications under a federal program.
The injunction appears to be the first in the nation to delay foreclosures in an entire state, the Associated Press reports. It applies to homeowners who have loans owned or guaranteed by Freddie Mac, Fannie Mae or other lenders participating in the federal loan-modification program, the Wall Street Journal reports.
Fannie Mae sought the delay to give it time to identify borrowers who could benefit by the federal program. The ruling could affect 5,000 homes in South Carolina, according to RealtyTrac figures cited by AP.
Fannie Mae asked for the delay because of an unusual state law designed to ensure timely foreclosures. The law allows judges to cancel a foreclosure and start over if there is a lengthy delay, a costly possibility, the State reports.