Judicial Foreclosure

In Ohio, the foreclosure laws set forth a judicial process. That means that the foreclosure process goes through the Ohio court system. When a borrower can no longer pay their debt (usually mortgage payments), the lender files a complaint in court. The court then gives the borrower a certain amount of time to pay off the debt to avoid foreclosure. If the borrower fails to pay back the debt during that time, Ohio foreclosure laws allow the court to advertise the property for sale. Judicial foreclosure is a legal action, and under Ohio foreclosure laws, a trial will occur.

Time Frame for Foreclosure in Ohio

Under Ohio foreclosure law, the timeframe for foreclosure generally takes 150 days. After the initial complaint is filed in court, the borrower usually has 28 days (though the judge sets this time frame in each case) to make enough payments to make their loan current. If the payments are not made, the judge will then issue a foreclosure decree, which then allows the sheriff’s office to place the property for sale. The sale is advertised for at least 30 days. During that time, the property is appraised; when the sale occurs, the price begins at 2/3 of the appraised value. The money from the sale goes first to pay off the debt, then to the lender.

What Steps Should I Take to Avoid Foreclosure?

Foreclosure is often due to unforeseen circumstances. Things like loss of job, divorce, unplanned bills (medical or otherwise), or bankruptcy are common reasons why homeowners can’t make their mortgage payments. Some lenders will let you defer payments to avoid foreclosure, especially if the reason you cannot make payments is temporary. In other cases, the only way to avoid foreclosure is to declare bankruptcy. Declaring bankruptcy has its own set of consequences; talking to a financial advisor and a lawyer are advisable before this option is taken. The most basic way to avoid foreclosure is through financial planning. Putting money in savings each month will ensure that if you do have unforeseen circumstances, you have the money to continue to make your mortgage payments. Purchasing a home that you can afford seems like an obvious solution as well, but many people stretch their budget to purchase a more expensive home. This leaves no money for savings, and can lead to problems is a change in income occurs.