In what may be the first statewide order of its kind, the South Carolina Supreme Court has temporarily suspended an estimated 5,000 pending home foreclosures to give homeowners more time to take advantage of a new government program that helps them refinance their mortgage, The Associated Press reports (‚ÄúTop SC Court Halts Thousands of Foreclosures to Let Owners Refinance; May Be First in Nation,‚ÄĚ May 5, 2009).
In March, the Obama administration announced a plan to help homeowners avoid foreclosure that would provide billions of dollars in incentives to lenders for modifying home loans.
As part of that plan, government‚Äďowned lenders Fannie Mae and Freddie Mac, the two largest mortgage holders in the nation, unveiled a flexible refinancing program that would assist homeowners in obtaining a lower interest rate on their mortgage and mortgage payments homeowners could afford.
South Carolina‚Äôs temporary mortgage suspension plan comes as a result of a request from Fannie Mae‚Äôs attorney, Ronald Scott, who argued that a temporary suspension of foreclosure sales was necessary to ensure that homeowners who qualify for the federal programs wouldn‚Äôt lose their homes before being able to take advantage of the program.
Under the court‚Äôs ruling, South Carolina judges will be prevented from finalizing foreclosure sales statewide on properties with mortgages held by Freddie Mac, Fannie Mae, or any other lender that is participating in a federal housing assistance program.
Mortgage experts say that the ruling may be the nation‚Äôs first court-ordered foreclosure stop for an entire state.
Freddie Mac spokesman Brad German said that this ruling, issued by a court that has statewide jurisdiction, is the first he‚Äôs heard of in the country. He said, ‚ÄúWe‚Äôre not aware of anything like this, anywhere else.‚ÄĚ
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