South Carolina Blocks Foreclosures Until Housing Plan Enacted
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In an interesting move, foreclosures have been blocked from occurring in the whole state of South Carolina for loans from certain companies. The State Supreme Court has ruled that until the 75 billion dollar federal housing bill has been enacted homeowners should not be evicted and foreclosed upon. Instead, creditors should wait until the homeowner has the chance for a federally sponsored modification.
Now this is good in a way as it provides a specific timetable and rationale, but with homes across the country in foreclosure far exceeding the 75 billion dollar bailout, what happens when the homes are actually foreclosed upon? I will tell you, we will have a glut of foreclosures in the marketplace and the overall market will take a hit.
The actions of the South Carolina Supreme Court will be analyzed for years to come as an activist court measure that may prolong the housing slump in that state.
The Supreme Court of South Carolina halted foreclosures involving loans owned or guaranteed by Freddie Mac, Fannie Mae or other lenders intending to participate in the federal loan-modification program.
Roughly 6,300 properties in the state are in foreclosure proceedings, said Rick Sharga, senior vice president of RealtyTrac Inc., which tracks foreclosure data. The court’s order will likely halt at least half of these, he said.
In March, the White House announced a $75 billion plan that offered incentives for lenders to modify some mortgages.
Fannie Mae, which requested the temporary restraining order, said the ruling gives it “additional time to identify borrowers who may benefit from the administration’s modification plan and keep more struggling South Carolina homeowners in their homes with a sustainable mortgage.” via WSJ.com.
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Comment by Portland Real Estate on 7 May 2009:
Lets hope this does some good instead of just being “one of those” bills that never helps anyone out. I was just reading about a five hundred million dollar government program that ended up only helping 1 single family because it was setup and planned poorly.