A lien theory governs foreclosure laws in South Carolina. This means that the primary instrument of security is the Mortgage Lien. This lien secures the underlying loan by using the actual property as security. Lenders are required to appear in court to commence with foreclosure proceedings and this process takes approximately 150 – 180 days to finalize, if the action is uncontested and the borrower is not seeking a bankruptcy hearing. Borrowers are allowed to contest the court action and in instances such as this, the process takes even longer to come to completion.
The final judgment of foreclosure has to be issued by the court before the sale of the property is allowed to take place and this happens on the steps of the Circuit Court. The complaint is filed by the lender together with a Lis Pendens. This is a public notice which informs any interested parties that a foreclosure is taking place. Many investors use the Lis Pendens to investigate potential properties for sale.
The borrower is issued with the notice of sale and this also has to be published in a general circulation newspaper for three weeks prior to the sale taking place. The state of South Carolina makes use of a process known as “and application for and order of appraisal”. This is where an independent appraiser evaluated the highest possible value of the property and this will determine what any deficiency judgment may be issued. If the property is a residential property then these rights may be waived.
Rights of redemption exist in South Carolina, but these are not statutory, and time limits apply. Deficiency judgments are permitted if the sale price of the property does not meet the loan amount required. As we mentioned in the previous paragraph, deficiency judgments are subject to rights of appraisal.