Loan Modification Not Law Practice, South Carolina Supreme Court Holds

A bank that modifies a loan without participation by an attorney is not engaged in the unauthorized practice of law, the South Carolina Supreme Court held June 19, calling the issue a “novel question” (Crawford v. Central Mortgage Co.); (Warrington v. The Bank of South Carolina).

The ruling by Chief Justice Jean H. Toal involved two cases, both of which concerned borrowers who sought to prevent foreclosure by claiming their loan modifications violated state law.

They said loan modifications amount to law practice because modifications change “the existing terms of the legal rights of the parties” ...