Those who are struggling through or risking foreclosure are invited to talk about their experiences with members of the South Carolina General Assembly this week.
Members of the Senate Banking and Insurance Committee are traveling around parts of South Carolina for a series of hearings. They were in Greenville Monday and will be in Columbia Tuesday and Charleston Thursday.
Acting chairman Wes Hayes (R-Rock Hill) said they hope to learn about the challenges and problems some homeowners are facing. “I haven’t heard from a lot of people, but I’ve heard from some in my (law) practice,” he said, “A lot of times, they just don’t know where to turn. If there is some help or some program available to help, part of the problem is that they just don’t know about it.”
Illustrating Hayes’s point was a recent report from the South Carolina State Housing Finance & Development Authority showing that only 1,200 homeowners have taken advantage of a new mortgage assistance program, despite estimates that anywhere from 20,000-33,000 would meet the program’s requirements statewide.
The committee is considering several changes to how banks can foreclose on a house. That includes bill S.702 that would, among other things, require banks to first go through mediation with a neutral party before a judge could rule on a foreclosure.
Under an executive order from Chief Justice Jean Toal earlier this year, judges now have to review each foreclosure case, but do not have to recommend mediation. One of the new bill’s sponsors, Sen. Mike Rose (R-Dorchester) said the current rules are causing problems for homeowners.
“I received numerous complaints about foreclosure abuses in Dorchester County and, upon investigation, determined there has been much abuse here and throughout South Carolina,” Rose said in a press release. “In response, S. 702 is an effort to stop the abuse.”
Banks do not like the idea. The South Carolina Bankers Association says the current rules are the best way forward. Senior Vice President Neil Rashley said the judicial system and federal government have already made serious changes in the past two years.
Rashley said banks tend to foreclosure on a home because a person is not able to make their payments at all. “They’ve lost their job. There’s been a severe illness. There’s something that has occurred that is extremely unfortunate… to where they simply cannot pay any more,” he said, “To force the court system, lenders, and everyone else to bear the cost of a mediation that will be fruitless makes no sense.”
Rashley said banks do not like to foreclose on a home because it usually means they lose money on the loan and it hurts their image in the local community. He said they are only done as a last resort.
However, Rose, said he’s pushing for the change because of numerous abuses in the current system that include excessive attorney fees, intimidating of bidders at foreclosure auctions, and judges who violate the law by having secretaries hold foreclosure hearings.