Ex Parte Federal National Mortgage Association,
In Re Federal National Mortgage Association (“Fannie
Mae”) Loans Subject to Foreclosure Sale.
Petitioner asks this Court to issue an ex parte temporary
or restraining order “enjoining all judicial officials in South Carolina
conducting foreclosure sales on May 4, 2009 (or the next judicial sales dated)
from dismissing all eligible one- to four-unit owner occupied properties
securing Fannie Mae portfolio mortgage loans and MBS pool mortgage loans
guaranteed by Fannie Mae for which there is a foreclosure judgment.” It
asserts that this injunction is necessary to avoid undue costs if these
foreclosure actions are dismissed rather than stayed or postponed based on the
fact that the underlying loans may be subject to modification under the
Homeowner Affordability and Stability Plan, the Home Affordable Modification
Program (HMP), and the United States Treasury Supplemental Directive 09-01. It
also states that, “absent injunction, mortgagors eligible for relief under the
HMP program could be denied their right to participate because their property
was sold at the foreclosure sale. This qualifies as irreparable injury for which
the court should provide redress in the form of a temporary injunction.”
While I am very troubled by the ex parte nature of
I grant a temporary restraining order (TRO) preventing the foreclosure sale of
any property arising out of a loan owned or guaranteed by petitioner or Freddie
Mac or held by a servicer who has signed an agreement to participate in the HMP3.
If a sale has already taken place today prior to issuance of this order, this
TRO shall stay the master-in-equity, circuit court judge or special referee from
taking any further action to complete the sale including the issuance of a deed
to the purchaser.
By May 15, 2009, the plaintiff in every mortgage foreclosure
action stayed by this order shall serve on all other parties to the action
(including petitioner and/or Freddie Mac as appropriate) an affidavit setting
forth its belief whether the loan is subject to modification under the HMP. If
the affidavit indicates that the loan is subject to modification under the HMP,
the foreclosure shall be stayed pending a determination if the loan will be
modified. If the loan is modified, the foreclosure action shall be dismissed. If
the loan is not modified, the foreclosure may proceed.
If the affidavit indicates that the loan is not subject to
modification under the HMP, the TRO will be lifted unless petitioner, Freddie
Mac or another party serves and files a counter affidavit asserting that the
loan is subject to modification under the HMP by May 22, 2009. If a counter
affidavit is timely filed, the TRO will remain in effect until the
master-in-equity or circuit court judge determines if the HMP is applicable to
the loan. The lower court shall insure that these determinations are made in an
If the loan is determined not to be subject to modification
under the HMP, the TRO shall be lifted and the foreclosure may continue. If the
lower court determines that the loan is subject to modification and the loan is
modified, the foreclosure action shall be dismissed. If the lower court
determines that the loan is subject to modification but the loan is not
subsequently modified, the TRO shall be lifted and the foreclosure may continue.
IT IS SO ORDERED.
||s/Jean Hoefer Toal
JEAN H. TOAL
Columbia, South Carolina
May 4, 2009
Under Rule 65(a), SCRCP, a temporary injunction cannot be issued without notice
to the adverse party.
Petitioner has known about the facts supporting its request for injunctive
relief for almost a month before filing this petition, and could have provided
notice to the opposing parties during that period. If it were not for the
interest of mortgagors who may be entitled to a loan modification, I would deny
the requested relief based on petitioner’s lack of diligence.
While petitioner asks for this relief only as to Fannie Mae owned or guaranteed
loans, this TRO applies to all loans that are subject to modification
whether owned or guaranteed by Fannie Mae or Freedie Mac, or a servicer who has
signed an agreement to participate in the HMP.