New Rules for Foreclosure Cases in South Carolina (“Morgtage Modification Redux”)

south carolina mortgage modification foreclosure orderWritten by Spartanburg Bankruptcy Lawyer, Däna Wilkinson

The South Carolina Supreme Court has ordered new mortgage modification procedures to be followed in foreclosure cases in South Carolina.  The intent of the new rules (the “2011 rules”) is to try to stem the tide of foreclosures in South Carolina, ensuring that foreclosure is a last ditch remedy instead of the first tool out of the box.  Whether the new rules will accomplish this goal remains to be seen, but at least the Supreme Court is making an effort.

A little background is in order.  In May 2009, the South Carolina Supreme Court, through Chief Justice Jean Toal, issued an order establishing new procedures to ensure that loans which were entitled to consideration under the government’s Home Affordable Modification Program (the “HAMP” program) were fairly evaluated and that lenders who voluntarily signed up for the program actually complied with the program’s guidelines.  Despite those procedures, however, foreclosures have continued to increase.  As Justice Toal states in the preamble to the new rules:

Since imposition of my prior order, the number of foreclosure actions filed in this State have continued to increase.  The trial courts having jurisdiction over such actions have reported to this Court difficulty in making final disposition of these actions as a result of failed or delayed loss mitigation efforts between lender-servicers and mortgagor-debtors.  As a result, the number of unresolved foreclosure actions has increased, with a resulting burden on the resources of the Court before which the action is pending.

The HAMP program is widely acknowledged to be a dismal failure.  As Justice Toal notes, the program is plagued by reports of mishandled documents, lack of adequate of staff to process applications, failure to properly train staff, and failure to communicate.  I could go on at some length, but suffice it to say that a program that depends on the mortgage servicing industry to handle modification applications efficiently is probably doomed to failure from the start.  Justice Toal is much too professional to say that, but reading between the lines, that may have been her conclusion as well.  This why the new rules don’t rely on the mortgage servicers to communicate with property owners about modification at all; foreclosure attorneys must now handle these communications.

That communication part of the new rules is a very significant provision, but it isn’t the only one designed to stem the flow of foreclosures where the property owner wants to modify the mortgage to try and keep his home.

First, the new rules don’t apply only to HAMP modifications.  HAMP is available where the mortgage in question is guaranteed by Fannie Mae or Freddie Mac, or where the lender has volunteered to participate in the program.  The 2011 rules apply to any “foreclosure intervention,” which is defined as “any policy, process or procedure employed by a Mortgagee for the purpose of seeking a resolution of a foreclosure action by loan modification or other means of loss mitigation.”  Yep, it says “any.”  So, if the lender has “any” loss mitigation or internal modification procedures, it must notify the homeowner of those options.  If the homeowner elects to apply for any mortgage modification–or “foreclosure intervention,” to use Justice Toal’s term–the foreclosure litigation has to wait on the conclusion of that application.  The lender can’t proceed with the foreclosure action at the same time.

As I read the rules, lenders can’t offer the homeowner the foreclosure intervention, deny the intervention and then foreclose, without offering the options again.  So for example, say that you applied for a mortgage modification through your lender before you got behind on your payments, but your the lender lost your application, or didn’t get the documents you sent (or said they didn’t, at any rate) and then turned down your application.  The 2011 rules seem to say that the lender can file a foreclosure action with the court, but at the same time, they have to send you information about their foreclosure intervention programs, give you the opportunity to re-apply, and this time handle all the paperwork through the lender’s attorney’s office.

No one knows whether the Court’s new order will help, and how the trial court judges will apply these new rules, but it’s certainly a step in the right direction.  I applaud our Court for doing its best to ensure that hard working South Carolinians don’t needlessly lose their homes when they would otherwise qualify for mortgage modification.  As William Jennings Bryant said over 100 years ago, “You shall not crucify mankind upon a cross of gold.”  Let’s hope corporate America gets this message and gets it’s act together.


Däna Wilkinson (pronounced "Donna") is a bankruptcy lawyer practicing in Spartanburg, South Carolina and serving South Carolina's upstate region, including Greenville, Spartanburg, Gaffney, Union, Anderson, Easley and Pickens. She has been in practice for more years than she cares to count, but it’s more than 20 years. Däna has been a bankruptcy lawyer from the very beginning of her career as a lawyer.

Däna went to law school at the University of South Carolina, where she was Student Works Editor on the South Carolina Law Review and a member of the Order of Coif. She started doing bankruptcy work while still a student, working for a bankruptcy boutique firm whose members included a Chapter 7 panel trustee, and recognized experts in Chapter 11 reorganizations. She enjoyed the work from the beginning, and upon graduation took a job as a law clerk to the Honorable Rodney Bernard, bankruptcy judge for the Western District of Louisiana. Judge Bernard had spent a number of years on the bankruptcy bench, and was an excellent teacher and mentor. Upon Judge Bernard’s retirement, Däna stayed on for a time as clerk to the Honorable Donald W. Boe, until homesickness for South Carolina struck, and she returned to private practice in Charleston. Four years later, she received an offer to return to Columbia, where she practiced until 1997.

In 1997, planning to start a family, Däna decided to return home to the Upstate, and opened her own practice in Spartanburg in 1998. Over the years, Däna represented all sorts of parties in bankruptcy: business debtors in reorganization, individual debtors, creditors and creditors’ committees, and trustees. In establishing her own practice Däna decided to focus on consumer debtors, ordinary people who find themselves overwhelmed by debt. Her focus is on the individual needs of clients, and on crafting a solution to their unique financial needs. She is committed to helping clients make a fresh start, and preserving their dignity in the process.

Däna is the proud mother of a beautiful, talented and very active daughter, who is, as her mother says, “practically perfect.” She is also active in both church and community activities, all of which means that there is a fair chance that any given blog post was written while in the car pool line or while waiting for a hearing or a meeting to start.

Däna is also certified as a bankruptcy specialist by the South Carolina Supreme Court, which means that she has taken and passed a proficiency examination on bankruptcy law, devoted her practice to bankruptcy for a number of years, and continues to take classes on bankruptcy law and related issues.

Contact information for Däna Wilkinson:

Law Office of Däna Wilkinson
365-C East Blackstock Road
Spartanburg, SC 29301
(864) 574-7944
[email protected]

Däna also blogs at


  1. TERRI GURLEY says:


  2. admin says:

    You can contact Dana Wilkinson. Check out the “The Lawyers” page for her information.

  3. My story began in August, 2010 when my husband and I were served a Lis Pendens by a SC Attorney’s Office representing Wells Fargo Bank, NA. Wells Fargo vacated the foreclosure and it was back to submitting paperwork. At this time, I began an intense research of my mortgage loan requesting alot of information from Wells Fargo. Some of this information took months to receive. In my research, I discovered fraud in almost every stage of the process including fraudulent signatures, endorsements, and court documents. This week a another supplemental hearing was held and a sale date was set. Because I had not filed the information within the time frame of the complaint (most of which I did not have at the time) the judge would not listen to me. What can I do after the judge has set a sale date besides bankruptcy? Wells Fargo does not own my mortgage and note.

  4. v marshall says:

    I would like to know the name of a lawyer in Chas., SC for a possible lawsuit against BOA for practice. Are there any class action suits in SC against Bank of America?

  5. D Miller says:

    V Marshall, we are looking for an attorney re BOA as well! Did you find someone to help?

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