The South Carolina Supreme Court on Tuesday ordered a 90-day halt to all pending foreclosures in the state, to give banks and borrowers more time to pursue loss mitigation.
Chief Justice Jean Toal wrote in a four-page order that trial courts have reported breakdowns in communications between lender-servicers and debtors and that foreclosure proceedings are concluding too hastily. The order applies to all foreclosures still pending on May 9. No hearings or sales may be held until borrowers are given an opportunity to try to modify loan terms, the order said.
More than 23,500 homes in South Carolina were in foreclosure at the end of March, according to RealtyTrac Inc.
Federal regulators issued consent orders last month against the 14 largest servicers that require them to improve loss-mitigation efforts and create a single point of contact for troubled borrowers. The consent orders also banned the practice of dual tracking, in which borrowers given trial modifications were also given notices of foreclosure.