I was recently asked by a friend if foreclosures were increasing in South Carolina and if so where?
That’s not an easy question to answer. The first problem is determining what is meant by “foreclosure.” Is the source referring to loans that are late but action has not yet been taken by the bank? Or is the source referring to Filngs? or Sales? or the number of REO Properties?
Technically, a “foreclosure” does not occur until the homeowner loses her right to pay the debt off and redeem the property. This doesn’t happen until the foreclosure sale is concluded. In South Carolina, to get to the foreclosure sale, a mortgagee (“The Bank”) has to commence a legal action. A Summons and Complaint must be filed and served on the mortgagor. This would be a “Foreclosure Filing.”
If the term is used to describe the number of delinquent loans, that has its own problems. Different banks have different timelines before beginning action after a failure to pay. This could skew results because banks are not evenly distributed.
Foreclosure is also used to refer to homes that are REO, or owned by the bank (literally “Real Estate Owned”), after the foreclosure sale. This, by the way, is your best bet for a deal–but that’s for a later post.
All this is to say that when a source says “foreclosures are up in South Carolina” they could be talking about filings, sales, defaults, or the number of bank owned properties.
I don’t have any hard facts as to what is actually happening in South Carolina, but I have been talking with the Masters in Equity and Special Referees who handle the foreclosures . Filings are definately up in every county in South Carolina, but fewer are going to sale than ever. More and more sales are getting cancelled. This is due to either bankruptcy filings, loan modifications, extensions of time for workouts or the bank finally taking a look at the property and realizing it’s not worth enough to own.
My feeling is that the metro areas are hit the worst. That is where the most speculation construction was centralized. The metro areas are obviously the areas with the highest raw numbers of sales, but they also have the highest populations. Add to that individuals who are near poverty also tend to congregate in metro areas where public assistance is more available.
Filed under: Foreclosure, General Information
