S 0267 General Bill, By Passailaigue
 A Bill to amend Article 7, Chapter 3, Title 29, Code of Laws of South
 Carolina, 1976, relating to mortgage foreclosure, by adding Section 29-3-800,
 so as to provide that contractual provisions for attorney fees in the amount
 of a specified percentage of the balance due upon default of a mortgage or
 note are unconscionable, that in foreclosure actions the court must make a
 finding as to the reasonableness of attorney fees notwithstanding any
 contractual provision that would award attorney fees as a specified percentage
 of the balance due upon default, and that parties to a foreclosure action may
 agree to the amount of attorney fees due, and in the event the parties reach
 such an agreement, the court is not required to make a finding as to the
 reasonableness of the attorney fees.

   11/14/94  Senate Prefiled
   11/14/94  Senate Referred to Committee on Banking and Insurance
   01/10/95  Senate Introduced and read first time SJ-114
   01/10/95  Senate Referred to Committee on Banking and Insurance SJ-114
   03/09/95  Senate Committee report: Favorable with amendment
                     Banking and Insurance SJ-15
   01/25/96  Senate Amended SJ-28
   01/31/96  Senate Read second time SJ-24
   01/31/96  Senate Ordered to third reading with notice of
                     amendments SJ-24
   02/08/96  Senate Read third time and sent to House SJ-31
   02/13/96  House  Introduced and read first time HJ-23
   02/13/96  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-23

January 25, 1996

S. 267

S. Printed 1/25/96--S.

Read the first time January 10, 1995.

A BILL

TO AMEND ARTICLE 7, CHAPTER 3, TITLE 29, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MORTGAGE FORECLOSURE, BY ADDING SECTION 29-3-800, SO AS TO PROVIDE THAT CONTRACTUAL PROVISIONS FOR ATTORNEY FEES IN THE AMOUNT OF A SPECIFIED PERCENTAGE OF THE BALANCE DUE UPON DEFAULT OF A MORTGAGE OR NOTE ARE UNCONSCIONABLE, THAT IN FORECLOSURE ACTIONS THE COURT MUST MAKE A FINDING AS TO THE REASONABLENESS OF ATTORNEY FEES NOTWITHSTANDING ANY CONTRACTUAL PROVISION THAT WOULD AWARD ATTORNEY FEES AS A SPECIFIED PERCENTAGE OF THE BALANCE DUE UPON DEFAULT, AND THAT PARTIES TO A FORECLOSURE ACTION MAY AGREE TO THE AMOUNT OF ATTORNEY FEES DUE, AND IN THE EVENT THE PARTIES REACH SUCH AN AGREEMENT, THE COURT IS NOT REQUIRED TO MAKE A FINDING AS TO THE REASONABLENESS OF THE ATTORNEY FEES.

Amend Title To Conform

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Article 7, Chapter 3, Title 29 of the 1976 Code is amended by adding:

"Section 29-3-800. (A) Contractual provisions for a mortgagee or creditor to obtain attorney fees upon default of a mortgage or note in the amount of a specified percentage of the balance due upon default are unenforceable.

(B) In any foreclosure action in which a mortgagee or creditor is seeking attorney fees pursuant to a contractual provision awarding attorney fees in the amount of a specified percentage of the balance due upon default, the court must make a finding as to the reasonableness of the attorney fees and award only such fees as are reasonable.

(C) Parties to a foreclosure action may agree to the attorney fees due the mortgagee or creditor upon default, and in the event the parties reach such an agreement, the court is not required to make a finding as to the reasonableness of the attorney fees as provided in (B)."

SECTION 2. This act takes effect upon approval by the Governor.