Ohio’s Revised Foreclosure Law

Ohio’s Foreclosure Law was recently revised in Ohio Substitute House Bill 138 (effective September 11, 2008) to help shorten the timeline of foreclosures, help reduce the backlog of foreclosure cases on court dockets, and help resolve inconsistencies that exist among counties in Ohio regarding handling foreclosures.

Among the significant changes in the law are the following:

1. Mediation. Under the new law, a court, at any stage of the litigation may require both the mortgagor and the mortgagee to participate in mediation. While there are no guarantees, mediation is bound to help shorten the process in some cases, as well as reduce the costs involved.

2. Improvements in the Information Process.

A. Preliminary Title Report. Under the new law, to proceed with a foreclosure action, it will be first necessary for the plaintiff to file a standardized “preliminary judicial report” which, in effect, is a guarantee of title issued by a title insurance agent, and which must be filed within 14 days after the complaint is filed. For commercial property (and residential property consisting of more than four single family units), either a preliminary judicial report or a title commitment can be filed to satisfy this commitment.

B. Advertisement of Sale. The new law requires that any notice and advertisement for the sale of land situated in a municipal corporation contain the street number of any buildings on the land, as well as the website address of the officer (e.g. County Sheriff) in charge of the sale. The advertisement of the sale must be published for at least three weeks prior to the sale (vs. 30 days prior to the sale under the prior law).

C. Legal Description/Open House. The officer holding the sale must provide a legal description upon request, and may allow an open house to be held at a vacant property so that persons wishing to view the property prior to the sale can do so.

D. Purchaser Information. Under the new law, a successful bidder must now deliver to the officer in charge of the sale the bidder’s name, address, phone number, the identity of a specific individual who can be contacted with respect to the sale, and a statement indicating whether or not the purchaser will personally occupy the property.

3. Due Date for Payment to Complete the Sale. The purchase price balance must be paid by the successful bidder within thirty (30) days after confirmation of the sale, or the purchaser will be held in contempt of court. There is no exception for lien-holder/purchasers.

4. Due Date for Delivery of Deed. The attorney filing the Writ of Execution must, within seven days after the filing of the Order of Confirmation of Sale, deliver the deed to the officer who sold the real property. The officer must then record the deed. This procedure was designed to prevent “flipping” of property.

5. Confirmation of Sale Requirement. The new law requires the court to enter the order confirming the sale within thirty (30) days after the sale.

Most commentators believe that the new revisions to Ohio’s Foreclosure Law will add expedience and fairness to the process. Because of the added nuances to new and existing procedures, legal counsel is always advised, no matter what side of the foreclosure process you may find yourself on.

To review Ohio Substituite House Bill 138 in its entirety, click: http://www.legislature.state.oh.us/bills.cfm?ID=127_HB_138

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