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As discussed in a July Editorial in the Cleveland Plain Dealer "Rep. Dennis Murray, a Sandusky Democrat, is working on legislation that would require banks to take foreclosed properties to sheriff's sale quickly or lose their mortgage liens."
On October 21, 2009 State Representative Dennis Murray (D-Sandusky) introduced HB 323.
Following is a summary of the legislation.
State of Ohio HB 323 Summary
Foreclosure Filing Procedure
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Any foreclosure complaint must be accompanied by a written document that includes :
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The name of the note holder and a statement asserting that the named holder is the true party in interest with a right to file the action
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Whether the mortgage note has been securitized and if so, must identify any mortgage-backed security that holds the loan, and the name of the trustee of that mortgage-backed security.
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A statement, based on the best information of the person filing the foreclosure, whether the residential property is occupied and the date its occupancy status was last assessed.
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The plaintiff must file with the clerk the preliminary judicial report required by Ohio law within 14 days after filing the foreclosure complaint.
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If the mortgagor answers the foreclosure complaint, the plaintiff must file all of the following with the court within 45 days of the answer:
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If the mortgagor does not file an answer within 60 days its due date, plaintiff may file a motion for a default judgment during the next 60 days after the answer was due.
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Plaintiff's motion must include an affidavit attesting that:
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The plaintiff personally inspected the property,
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attempted to telephone all residences located on the property,
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sent correspondence to all residences located on the property
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That the plaintiff has no reason to believe that the premises are occupied.
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Upon receipt of the motion and affidavit, the court will issue a default judgment for the plaintiff.
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If the mortgagor does not file an answer, and the plaintiff does not file a motion for a default judgment, the plaintiff's complaint will be dismissed with prejudice. In addition, the plaintiff will have abandoned any right to the property or making any claim against the property, and the plaintiff will not receive any proceeds from a sale of the property.
Nuisance Abatement Actions
- A court may not issue any judgment that orders the sale of property that is pending a residential or residential area commercial property foreclosure action.
- The county recorder may not accept any foreclosure sale deed for recording if that property constitutes a public nuisance.
- The bill contains numerous provisions with procedures for conducting a probable cause hearing regarding whether the property constitutes a public nuisance.
- Probable cause may be based upon:
- Information provided by the plaintiff, including information contained in the property status report
- Information in a public record that indicates the existence of a building with air pollution, sanitation, health, fire, zoning, or safety code violations or other conditions that constitute a public nuisance;
- A court ordered inspection of the property, or a voluntary authorization of inspection of the property under any right of the plaintiff to enter the property.
- If at the hearing a plaintiff elects to abate the nuisance, the court will grant that request and require the plaintiff to report to the court within 30 days on the progress the plaintiff is making in abating the nuisance.
- The court must continue with the foreclosure proceedings if it determines that the plaintiff is making reasonable progress in abating the nuisance condition.
- If the plaintiff does not make reasonable progress, or does not report as required, the court may immediately approve any request made pursuant to Ohio law to bring a nuisance abatement action.
- The probable cause hearing must be stayed if the mortgagee or any judgment creditor submits a written pledge to bid at least the balance owed on the mortgage principle at the sale and if successful bidder, to abate the nuisance subsequent to taking title to the property.
- They have thirty days after the judgment creditor takes title to the property to provide the court with a written appraisal of progress in abating the alleged nuisance conditions. If the court does not receive an appraisal of progress within that time, the court may resume the probable cause hearing.
- If the court finds probable cause that the residential property constitutes a public nuisance, the plaintiff must file notice of that finding with the housing enforcement agency that responsible for enforcement of housing occupancy codes within the city or county where the property is located, if there is such an agency.
- An agency inspecting the residential property as a result of receiving this notice may charge the judgment debtor a reasonable fee for inspection costs.
- Any municipal corporation in which a property is located, or any neighbor, tenant, or nonprofit housing improvement corporation may intervene as an interested party at any time prior to the issuance of a foreclosure judgment to request court permission to bring a civil action abatement of a public nuisance.
- The bill contains procedures for notice to lienholders and their right to file a writ of execution as well as consequences if a lienholder fails to file, and distribution of the sale proceeds.
- if no lienholder files for a writ of execution or a contingent writ of execution, and the property owner does not redeem, the property owner and lienholders are deemed to have abandoned all rights to the property and the property is deemed an abandoned property. The title of such a property vests without further action in the name of the county recorder
- If property is deemed abandoned, the county prosecutor will prepare a deed to convey that property from the judgment debtor to the county recorder.
- The deed must contain :
- the names of the parties to the judgment and the owners of the property
- a reference to the volume and page of the recording of the next preceding recorded instrument by or through which the county recorder claims title
- the date and the amount of the judgment, and
- the date on which each lienholder is deemed to have abandoned the property.
- The county recorder must record the deed within fourteen (14) business days after the latest date on which a lienholder is deemed to have abandoned the property.
- The board of county commissioners may adopt rules for the disposition of property that is abandoned during a nuisance abatement action.
- The rules must specify that if the county has a land bank, the county recorder must place the property in that land bank . If the county does not have a land bank, the recorder may dispose of it at the discretion of the board of county commissioners.
- Judicial sale is the only order a court may make for execution of a judgment on a residential property when the action was brought by a mortgagee of that property.
- The bill contains provisions governing sales procedures for single tract, mult-tract and land located in more than one county
- The bill contains provisions regarding judgment liens on nuisance abatement action properties secured by a residential mortgage
- In any residential mortgage foreclosure action, the judgment debtor may redeem the property not later than sixty (60) days following the date the clerk provides notice that a judgment has been filed.
- Any redemption rights expire at the end of the business day on the sixtieth day following the clerk's notice of filing.
- Judgment will be set aside if the property is redeemed and amount due is paid
To view the Bill as introduced, please click here.
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