South Carolina chief justice Jean Toal placed all pending foreclosures in the state on hold Tuesday so that homeowners could try to “mitigate their losses and perhaps modify their loans.” Toal made a similar move last year in order to insure that homeowners could take advantage of new federal assistance programs[1]. Toal credited her decision to reports from other judges informing the State Supreme Court that they are having trouble ruling on foreclosures “because of failed or delayed mitigation efforts” between loan servicers and borrowers[2]. She hopes to diminish the number of unresolved foreclosure actions by temporarily suspending them all.
According to Judge Toal, “the trial courts report that such breakdowns [between borrowers and lenders] are largely the result of communication between lender-servicers and debtors.” Moving forward, a foreclosure cannot proceed until lenders certify that homeowners have been notified of the mortgage intervention process, lenders have received and examined all documents and records from the homeowner, and efforts and loan modification and other loss mitigation efforts have been “exhausted.” If the homeowners refuses, fails or chooses not to participate after being notified, then the foreclosure can proceed within 30 days. If an agreement is reached, there is a 90-day trial period before the foreclosure can be dismissed or resumed.
South Carolina had 23,681 foreclosures in March 2011.
Do you think that judges should continue to call the shots in foreclosures, including freezing them at large?
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[1] http://www.foxcarolina.com/money/27762986/detail.html
[2] http://www.greenvilleonline.com/article/20110504/NEWS/305040028/S-C-foreclosures-put-on-hold
In Colorado,a judge can be removed and litigated for making decisions in areas for which they have no degree, no expertize and little or no knowledge.
Dear Mr. Ellis: I am utterly surprised that you disagree with the Supreme Court Judge ruling. You of all people should know better. The Judiciary is the last line of defense the people of the United States in
the struggle against the greedy Banker’s that created this mess.
I don’t have any problem with lenders being held accountable for misdeeds. But everybody should have their day in court. This judge is denying/delaying that day, thus giving advantage to one side without legal authority. That’s unacceptable. — Bryan Ellis
I agree that judges should not be creating new laws. That is a legislative prerogative. However, in this case I’m in favor of it. It’s too bad that South Carolina’s legislators – and in other states as well haven’t had the guts to require mortgage lenders and loan servicers to more seriously attempt workouts wherever warranted.
The bad news is that Judge Toal’s ruling throws a big kink in lenders’ normal foreclosure procedures, and is clearly biased in favor of defaulting homeowners. The good news is that it slows the servicers’ historic rush to complete foreclosures, in lieu of seriously considering whether workouts are feasible. Mortgage workouts have been a largely failed and unevenly applied national policy under Obama.
True – Judge Toal added several months to the foreclosure process that potentially costs lenders and their investors significant additional losses on their already bad investments. But I can’t feel sorry for the Wall Street bankers who have made billions on the high risk loans they originated, bundled, and resold to unsuspecting investors (like retirement funds)- who have sustained huge losses in the mortgage meltdown. Combine this mortgage derivatives mess with the loss of homeowners’ individual mortgage paper trails through the bankers’ MERS scam, their robosigning and fraudulent foreclosure schemes, the resultant loss of home values nationwide, and the loss of millions of citizens’ and homeowners’ life savings and financial futures. The mortgage industry created this massive train wreck. This mess is their fault, and they have made massive fortunes from it, with the help of massive government bailouts. It stinks. None of those mortgage fat cats has gone to jail because of their part in perpetrating this huge conspiracy. If any of us small investors tried to engage in similar mortgage or foreclosure scams, you can bet we’d have free room and board in the Grey Bar Hotel for many years and be facing humongous restitution debts when we got out. In my opinion many of these financial power brokers should have become guests of Uncle Sam long before now.
So I think it’s time for the little guy to get his bailout too. I’m pleased to see that someone had the guts to put the brakes on these greedy bankers’ rush to protect their investments by completing foreclosures as fast as possible – delaying at least long enough to see whether borderline homeowners just might be able to stay in their homes with a little restructing of their risky subprime loans. In fairness to the bankers, the judge’s ruling does allow foreclosures to proceed in 30 days for those homeowners who decide against a workout.
Dan