Before the foreclosure crisis, which culminated in 2010, federal and state laws governing mortgage service and foreclosure procedures were rather limited and tended to favor lenders. Now, however, loan assistance and foreclosure processes are largely governed by federal and state laws. And most of the laws provide protection to borrowers.
Services are generally required to provide borrowers with loss mitigation opportunities, take into account all stages of coverage, and strictly adhere to foreclosure laws. In addition, most people who apply for a loan to purchase a residential property in Ohio sign a promissory note and a mortgage. These documents give homeowners certain contractual rights and federal and state legal protections.
In Ohio foreclosure, you will likely be entitled to:
So don’t worry about security if you own a home in Ohio and fall behind on your mortgage payments. Learn about every step of foreclosure in Ohio, from default to a foreclosure sale. Once you understand the process, you can make the most of your situation and hopefully find a way to save your home or at least get through the process with as little worry as possible.
What is the foreclosure process in Ohio?
If you default on your mortgage loan in Ohio, the foreclosure will be judicial.
How court executions work
Judicial foreclosure begins when the lender files its lawsuit asking the court for an order allowing the sale of the foreclosure. The lender notifies the lawyers by subscription and complaint. The summons should contain instructions on when and where an answer must be filed, along with other important information about the closed case. If the court has a mediation program, the summons will likely contain information on how to participate in mediation, including a request form.
Carefully review the application and accompanying documents, which will include a copy of the promissory note and mortgage you signed when you applied for the loan. If you disagree with the allegations or see that the lender did not include the appropriate documentation, you can raise these questions in your answer. You have 28 days to respond to your complaint and (or by post) deliver your response or other response to the mortgage lender’s attorney. You must also submit your response or other response within three days of submitting the response. (Ohio Civil Rule 12 (A), 5 (D)). If you need more time to respond, you can file a motion with the court asking for an extension. If you do not submit a response or raise a specific defense in your response, you will be prevented from submitting it later, subject to some exceptions.
If you don’t comply with the law, the lender will ask the court and likely get a default judgment, which will allow you to have a foreclosure sale. But if you choose to defend the foreclosure lawsuit, the case will go through the litigation process. Your case may be assigned to a special foreclosure judge, for example in Cuyahoga County. The magistrate formulates conclusions and recommendations regarding the foreclosure. If you do not object to these decisions, or if the court violates your objection, the court may make the magistrate’s decision in whole or in part.
The lender can ask for a summary judgment. A summary judgment motion requires the court to register a judgment in the lender’s favor as there is no dispute over the critical aspects of the case. If the court gives the lender a summary judgment, or if you miss a trial, the judge will record a judgment and order your home to be auctioned.
The pre-hedge sale
In the sale, the lender usually makes a credit offer. The lender can make an offer up to the full amount owed, including fees and costs, or they can make a smaller offer. In some states, including Ohio, where the lender is the highest bidder in sales but offers less than total debt, it is possible to obtain a deficit judgment against the borrower. If the lender is the highest bidder, the property becomes known as “Property Ownership” (REO).
But if you are a bidder, let’s say a third party, the highest bidder and more bids than you owe, and the sale results in extra proceeds, i.e. money in excess of what is needed to pay the pledges on your property, you have entitled to that extra money.
How long do you have to move after foreclosure in Ohio?
Your statutory property rights cease when the court confirms the sale and a title deed is issued to the buyer.
How can I stop Ohio foreclosure?
Some possible ways to stop foreclosure include reinstating the loan, redeeming the property before the sale (or for a short time afterward), or filing for bankruptcy. Of course, if you can find a loss mitigation option like loan modification, that will also prevent foreclosure.
Ohio law does not give the borrower the right to repay the loan. However, your loan documents may allow you to pay it back. Check your mortgage to see if you are eligible to make a payment. Otherwise, the lender may agree to pay you back.
If you are struggling with foreclosure, filing for bankruptcy can help. In fact, if a foreclosure sale is scheduled for the next day, the best way to stop the sale immediately is to file for bankruptcy. When you file for bankruptcy, something called an “automatic stay” goes into effect. The stay serves as a court order that prevents the lender from foreclosure on your home or from trying to collect on your debts, at least temporarily.
Read about Ohio’s deficit ruling
In a foreclosure, the borrower’s total mortgage debt sometimes exceeds the foreclosure sale price. The difference between the total debt and the sale price is called the “deficit.” For example, the total debt owed maybe $400,000, but the house sells for $350,000 at the foreclosure sale. The shortfall is $50,000. In some states, the lender may seek a personal judgment against the debtor to make up for the shortfall. Typically, as soon as the lender receives a judgment of default, the lender can collect that amount, in our example $50,000, from the borrower.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.