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Foreclosures in Ohio
Foreclosure is the legal process by which a lender tries to recover a delinquent debt that’s attached to a real property, usually through a mortgage. The process is generally initiated after the borrower misses a certain number of payments.
If a lender has started the foreclosure process, you’ll want to contact an attorney right away. There are options to address a foreclosure, but the process, documents involved, and your possible defenses are complicated and quite intricate.
Topics we’ll cover in the following video:
- What is Ohio’s foreclosure process?
- Options to avoid losing your home
“I wanted to take a few minutes to say how happy and grateful I am having you and your team on my side. I can’t believe the service I got from the very beginning [and] the effort you and your firm put into helping your clients is unbelievable.”
LUFTMAN, HECK & ASSOCIATES CLIENT
Develop a Foreclosure Defense
Foreclosure defenses can arise from any aspect of the loan transaction, from the initial sales process to loan disclosure failure, loan closing, post-closing, servicing, pre-foreclosure, foreclosure, and even post-foreclosure property sale. You have options throughout the foreclosure process to develop defenses and save your home.
An experienced foreclosure attorney can evaluate your situation, which may benefit from a Chapter 13 or Chapter 7 bankruptcy, or review your mortgage and the associated documents to support a possible defense.
If the bank or any other entity involved in your loan told you something that was not true, then you may have a fraud claim. Their fraudulent actions may prohibit them from foreclosing on your home.
Some banks and financial companies utilize computers to sign documents or automatically apply your signature to multiple documents. This puts you at a disadvantage because you are not aware of the actual terms and conditions. If your lender or mortgage company engaged in “robo-signing,” then foreclosure may not be an option for them.
Home loans require a significant amount of documentation. Regulations maintain that specific paperwork must be signed. If the bank or lender fails to get all necessary documents signed or doesn’t have copies, they may not be able to foreclose.
Another abusive practice in the mortgage industry is predatory lending. Although less common these days, predatory lending occurs when a lender uses misleading and deceptive tactics to convince people to take out loans they can’t afford. Many people end up bankrupt or in foreclosure due to these predatory loans, especially when refinancing promises never materialize.
If you’ve been the victim of predatory lending or believe another foreclosure defense applies, you may be able to file a lawsuit, negotiate for a favorable result, or otherwise keep your home. You won’t always need a lawyer, but it’s wise to consult an attorney about what addresses your unique situation.
Not Just Any Debt Attorney
A founding partner at LHA, Jeremiah E. Heck, is a leader in consumer law, known for fighting large banks and sound guidance to avoid foreclosure.
Your Options in a Foreclosure
There are multiple ways a foreclosure lawyer can help. Not every option requires an attorney, but after assessing your situation, the legal professionals at LHA may recommend the following:
If you can no longer make your mortgage payments, then your foreclosure defense attorney may be able to help you get a modification of your home loan. The lender is more likely to work with you if you address this early. When you fall behind on payments, you should reach out for options.
File for Bankruptcy
Either Chapter 13 or Chapter 7 bankruptcy will stop the foreclosure process against you. A Chapter 7 will usually require surrendering the property, while 13 allows you a manageable payment plan to include your mortgage payments. LHA has a team of bankruptcy attorneys who can evaluate your specific situation and determine which is right for you.
If you cannot afford to keep your home, or you do not want to remain under the weight of a mortgage, you may be able to negotiate a short sale with the lender. A short sale is a quick sale to a buyer other than the lender. The lender may agree to take the price earned through a short sale to fulfill your entire mortgage. This has the benefit of avoiding a foreclosure on your financial history.
Deed in Lieu of Foreclosure
Depending on your circumstances, you may agree to sign the deed of your home over to the bank. Whether a lender will be amenable to this solution depends on various factors, including whether you have any other mortgages or liens on the property and whether a short sale is likely.
The Foreclosure Process in Ohio
In most cases, if you become 30 to 90 days behind on mortgage payments, you will usually be contacted by your lender. They may send a “default letter.” This will give you a specific time to cure (or fix) the delinquency. You may be given only 30 days to make up all missed payments.
If you do not become current, the lender can begin the foreclosure process. Under Ohio law, once you are 120 days delinquent on a mortgage, the lender may begin the foreclosure.
The Foreclosure Complaint
The Complaint is a legal document that states the lender holds a note and mortgage on the property. In other words, the lender demonstrates their right to the property. The Complaint will detail what type of mortgage you have, the amount due, the amount you are delinquent, and why the lender is seeking to foreclose.
Responding to the Complaint
You will receive a Notice of Lawsuit filed by your lender. If that happens, you y have 28 days to respond. If you fail to respond, your lender will receive a judgment against you, and they can foreclose.
However, if you answer their Complaint, you may have an opportunity to negotiate to resolve it outside of court. This might prevent them from foreclosing on your home.
The Foreclosure Sale
If the lender successfully obtains a foreclosure, the home will be sold through a foreclosure auction, managed either by the Sheriff’s office or a private party, when approved by the court.
Ohio law requires that your home not be sold for less than two-thirds of the appraised value. This protects you and limits the amount of deficiency you may be liable for—the amount between what you owe on the mortgage and the amount the home is sold for.
Can the Lender Kick You Out During Foreclosure?
During the foreclosure process, the lender cannot evict you, throw your stuff on the curb, or change the locks until they obtain the legal right to do so. Houses in foreclosure are still the homeowner’s property until the lender legally obtains possession of the property, which typically comes through a final sale of the property to another party.
You cannot be removed from your home until the Sheriff’s sale is conducted and the sale to a new party is confirmed. Then, you will receive an eviction notice, which will give you a certain period to vacate your home. The amount of time you have may depend on which jurisdiction you live in.
Do You Still Owe Money After Foreclosure?
In Ohio, you can be held responsible for the balance of your mortgage balance foreclosure.
Sales of foreclosed homes do not always obtain prices that cover the amount owed on the mortgage. When the amount obtained through the Sheriff’s sale is lower than the full amount owed due on the mortgage, the difference is a deficiency. You can be liable for the deficit after an Ohio foreclosure.
For example, you may owe $150,000 on your mortgage. Your home may only sell for $110,000. You are left responsible for $40,000.
The lender may return to court and seek a deficiency judgment against you to obtain this. during this time, the lender can take several steps to obtain the money, such as wage garnishment.