If you’re facing an imminent foreclosure in Ohio, you should how the process works and learn about your rights under both federal and state laws. To get valuable information about Ohio foreclosure procedures, read on. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do’s and Don’ts.)
Federal law usually prevents the servicer from initiating a foreclosure until you’re more than 120 days delinquent on the loan. (To learn more about the law that delays the beginning of a foreclosure for 120 days, see How Soon Can Foreclosure Begin?)
Also under federal law, servicers are supposed to work with you if you’re having trouble making your monthly payments in a “loss mitigation” process. (“Loss mitigation” is what the mortgage servicing industry calls the process of working with the borrower to avoid a foreclosure.) (To learn more about federal mortgage servicing laws, see Federal Laws That Protect Homeowners During Foreclosure.)
If the servicer violates the law, you could potentially have a defense to the foreclosure.
Most foreclosures in Ohio are judicial, which means a court handles the process. The process officially begins when the loan holder (called the “lender” in this article) files a complaint with the court. After the lender files the complaint, you’ll be served a copy, along with a summons. The summons tells you about the suit, how to contact the lender’s attorney, and that the deadline to file a response to the suit, which is called an “answer.” Generally, you get 28 days to respond. If you fail to file a timely answer, the lender will likely get a default judgment. (To learn what typically happens if you don't file an answer in a foreclosure lawsuit, see Should You File an Answer to a Foreclosure Lawsuit?)
But if you file an answer, the foreclosure proceeds through the litigation process. The lender will likely file a motion for summary judgment asking that the court grant judgment in favor of the bank because there is no real factual issue to deal with at trial. If the court grants summary judgment, the judge will order the home sold at a foreclosure sale. If the court denies summary judgment, the foreclosure case will eventually go to trial where you’ll have to prove your case. If you’re unsuccessful, the judge will enter a judgment that allows a foreclosure sale.
After the court issues a foreclosure judgment, the lender has to publish a notice of sale in a newspaper for three weeks before the sale date. (For a more detailed explanation of the process, see Ohio Foreclosure Laws.)
Ohio law doesn’t provide the borrower with the right to reinstate the loan. The terms of the mortgage contract, however, might give you this right. To find out if you get the right to complete a reinstatement, check your loan documents.
Some states have a law that allows a foreclosed homeowner to redeem the home after the foreclosure sale. In Ohio, you get up until the court confirms the sale to redeem the property. (If you think you will lose your home to foreclosure, read When Do You Have to Leave Your Home When It’s in Foreclosure?)
If the total mortgage debt is more than the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to get a personal judgment (called a “deficiency judgment”) against the borrower for this amount.
Deficiency judgments are allowed in Ohio, but a judgment is void two years after confirmation of the sale by the court. Also, the property can’t be sold for less than two-thirds the appraised value at the foreclosure sale. (For more information about deficiency judgment laws in Ohio, see Deficiency Judgments After Foreclosure in Ohio.)
If you need help understanding the law, want to file an answer to the suit, or have questions about your particular circumstances, consider contacting a local foreclosure attorney. Homeowners facing foreclosure are also encouraged to contact a HUD-approved housing counselor.