A Quick Summary of the Ohio Foreclosure Process
“Foreclosure” is simply a term used to describe the legal process used by your mortgage company, or any other mortgage lender (such as a bank), to take possession of your home. A foreclosure is really just a lawsuit in which the mortgage company is suing you to take your house. If you have missed even a single payment, the lender has the right to foreclose, but usually will not do so until multiple payments have been missed. Ohio is a judicial foreclosure state, meaning a court oversees the foreclosure process. In Ohio, once the mortgage company has decided to foreclose, they will file a complaint with the court. If the mortgage lender is successful in the lawsuit, your home will be appraised, and then auctioned off at a public sheriff’s sale.
The entire foreclosure process can be completed in four to six months, but may take much longer. The process varies slightly from county to county, and it may be best to seek the advice of an attorney.
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When Can My House be Taken by a Foreclosure?
Many people believe that their home cannot be foreclosed on until they have missed several payments. This is not true. As soon as the homeowner has missed a single payment the mortgage lender may begin a foreclosure lawsuit. However, that is unlikely, and usually the homeowner is three to four months behind on house payments before the lender will seek to foreclose.
How Will I be Notified About a Foreclosure?
First, you will receive a “notice of default” letter. The notice of default letter may also be called an “intent to accelerate,” and is usually received about 30 days before the mortgage company files a complaint with the court.
Next, the mortgage company will file a complaint in the Court of Common Pleas for the county where your home is located. Once the complaint has been filed, the court will send a copy of the complaint to every person who has an interest in the home. Interested people would include the owner, the owner’s spouse, the government, or anyone with a lien on the property. A “lien” gives a person the right to hold onto the property until a debt has been paid. Those receiving the complaint are named as defendants in the lawsuit.
What Should I Do After I Receive a Foreclosure Complaint?
Contact an attorney. It is very important that you respond to the foreclosure complaint. After receiving the complaint, you have only 28 days (including weekends) to respond, or else the court may enter a default judgment against you. A default judgment is a declaration by the court that the mortgage lender wins, and a foreclosure will be declared. Moreover, failing to respond will actually speed up the foreclosure process, causing you to lose your home sooner.
There are a variety of ways that a homeowner can respond to the complaint:
- Motion to Dismiss: If you believe that the mortgage company is foreclosing improperly, you may file a “motion to dismiss” the complaint, which is simply a way of asking the court to drop the lawsuit.
- Answer: You may “answer” the complaint by stating which of the allegations contained in the complaint filed by the mortgage lender are true, and which you wish to dispute.
- Extension: You may also ask for an “extension,” which is nothing more than asking for more time to respond to the complaint than the usual 28 day period.
The best way to respond will depend on your unique situation. It is best to receive advice from an attorney before deciding how to respond. It is important to know that once you have filed your response, you may still work out a solution with your mortgage lender to have the lawsuit dropped. However, this typically requires making a substantial payment towards arrearages, if not the full amount owed.
After your response, the mortgage lender will probably file a “motion for summary judgment,” which is a way of asking the court to declare that you have no proper legal defense to the foreclosure lawsuit. Therefore, if the motion is successful, the mortgage lender has won the lawsuit, and the foreclosure will move forward.
What Happens After the Court Declares a Foreclosure?
Should the homeowner lose the foreclosure lawsuit, the court will declare a “sheriff’s sale.” This means that the property will be sold at a public auction. Before the auction is held, the sheriff will have your property appraised to determine its value. At the auction, your home will be sold to the highest bidder, but will not be sold for less than 2/3 of its appraised value.
Anyone may purchase your home after it has been foreclosed. Yet, those with an interest in the property, as well as family and close friends, may only purchase the property by paying the full amount that you owe. After the sale is complete, the court will validate the sale with a “writ of confirmation.” Once the sale has been confirmed, the purchaser has the right to occupy the property. If you have not yet left the property, either the mortgage company or the purchaser may ask for a “writ of possession” to have you forcibly removed.
Can I Still Save My House After the Foreclosure Sale?
Yes. After the Sheriff’s sale, you can still save your house during the “redemption period” by paying the full amount owed. The redemption period is the time between the sale of the home at the auction, and the confirmation. This time period may be as long as 90 days, or as brief as a day or two.