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South Carolina Makes Way for Government Foreclosures Program

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By : John Cutts    99 or more times read
Distressed South Carolinian homeowners have been given another lifeline. Their state Supreme Court has just issued a ruling ordering judges to temporarily suspend foreclosure approvals on mortgages guaranteed by Fannie Mae, Freddie Mac or any of the mortgage lenders that have signed to participate in the government home foreclosures program.

The ruling, the country’s first Supreme Court-ordered foreclosure suspension statewide, was the court’s response to a motion from Columbia lawyer Ronald Scott who explained that many more distressed South Carolinian homeowners will be helped under the government foreclosures program if only their houses are not yet sold in foreclosure sales.

Lawyer Scott, who is representing Fannie Mae, explained that the rights of distressed homeowners qualified for help under the government foreclosures program should be preserved through a temporary injunction from the highest court of the state.

Fannie Mae said mortgage lenders who hold mortgages in South Carolina are speeding up their foreclosure filings in the state because of a state law aimed at facilitating foreclosure sales.

The state law allows judges to cancel a foreclosure filing if the foreclosure sale takes too long, forcing mortgage lenders to start all over again in filing their foreclosure cases. This puts additional cost burden to lenders, so they speed up their foreclosure filings and sales.

Moreover, Fannie Mae officials said that the temporary injunction will allow them to evaluate mortgages that could be eligible under President Obama’s government foreclosures program. All in all, the temporary injunction can help both borrowers and mortgage lenders in terms of costs related to foreclosure proceedings.

In March, President Obama launched the details of the $75-billion government foreclosures program which aimed to help mortgage lenders modify distressed loans to help stop the wave of foreclosures. The other part of the program is a loan refinancing scheme for mortgages held by Fannie Mae and Freddie Mac.

In Scott’s motion, he had asked the Supreme Court to specifically address the problems of around 1,000 distressed homeowners whose mortgages are guaranteed by Fannie Mae. But South Carolina Chief Justice Jean Hoefer Toal decided to extend the suspension to all other mortgages held by lenders who had signed to participate in President Obama’s government foreclosures program.

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