Life happens. And everyone goes through a time in life when there’s a hardship that might cause financial obstacles.
Whether you’ve hit a “bump” on the road with paying your mortgage, or you’ve lost your job, or some other financial distress — it doesn’t matter — we want to help you and give you ALL The information you need to make the best decision for your situation.
Because everyone’s situation is different — but the process for foreclosure and the little ways to stop it don’t change.
Before you go, if you didn’t know…
Ohio, is a “judicial Foreclosure”.
That means that the lender must take you to court to go through foreclosure.
That’s good and bad.
Bad in that you have to deal with the hassle of a trail.
Good in that judicial foreclosure typically takes a little longer than “non-judicial” foreclosure in some states.
Let me break down the steps of foreclosure in Ohio:
**Before we go on… know that we’re not lawyers. We are only house buyers. Consult with an attorney regarding foreclosure law and what you can formally and legally do. This article is only meant to entertain and inform from our point of view, which is not legal advice.
Step for a Judicial Foreclosure in Ohio
1. Default on Mortgage Payments
- The borrower fails to make payments, usually for 90+ days.
- The lender sends a Notice of Default.
2. Filing of Foreclosure Lawsuit
- The lender files a complaint in court.
- The borrower is served with a summons and has 28 days to respond.
3. Court Proceedings
- If the borrower fails to respond, the lender can request a default judgment.
- If the borrower contests the lawsuit, the case goes through court proceedings.
4. Judgment and Sheriff’s Sale
- If the lender wins, the court issues a judgment of foreclosure.
- A sheriff’s sale is scheduled, and the property is auctioned.
5. Redemption Period (Optional)
- Ohio law allows a redemption period before the sale, where the borrower can repay the debt to reclaim the home.
6. Eviction
- If the property is sold, the new owner can file for eviction if the borrower has not vacated.
**It’s important to note that these timelines are approximate and can be influenced by various factors, including court backlogs, borrower responses, and the complexity of the case. It’s advisable to consult with a foreclosure attorney or seek legal advice for precise timelines
That’s a lot of steps!
And the farther you get into it, the more hassle and difficulty to stop the process or even sell your property.
So once you start this whole thing… come up with plan A, plan B, and Plan C to stop it before you get to the “auctioning” of your property….
Where you’ll get no penny back and some low-ball investor will get your house.
So here are 6 ways (actually 7 with a bonus at the end), to stop foreclosure:
- Bank Negotiation — You can actually work out a compromise with the bank during the NOD stage. They WANT to help. They don’t want to take up the hassle of owning a property, and/or going into the auction. They can work out a new agreement that modifies your loan to something you can afford and makes sense to them. It’s as easy as calling the number they give (they should have mailed you a few times by now)
- Short sale — In some counties, for every offer you receive the bank MUST consider it. And if you owe more than what the house is worth, you’ll have to do what’s called a “short sale” which means you sell for less than the loan amount. And sometimes The truth is, if a bank takes over your house, they are going to try and immediately sell it (and sell it for a VERY low price to an investor); they actually DON’T want that hassle. And will consider a “short sale” offer instead — even if it means they’ll lose money. After the NOD has been initiated, it’s important to start searching for offers immediately for banks to consider.
- Bankruptcy — This stops foreclosure dead in its tracks. Once you file a bankruptcy petition, federal law prohibits any debt collectors, including your mortgage lender, from continuing any collection (including foreclosure. This might sound like an ideal situation, but here’s the truth of it: You’ll have to go to court, and your debt collectors (the bank/lender) will also appear in front of the judge. The judge’s role is to play “referee” between you and the bank, and you still might have to owe after that. The method only buys you time, and the judge may create a “payment plan” for all that you owe. It doesn’t necessarily “erase” foreclosure… and… it will be on your record for a while. Consult with a bankruptcy attorney regarding whether filing for bankruptcy is a good strategy for you.
- Deed in Lieu of Foreclosure — You can, through negotiation, offer to sign over the house deed to the bank/lender. They become the new owner overnight and you won’t get the equity, and you’ll have to leave the house or be evicted. This method certainly does stop foreclosure easily and quickly, but with some drawbacks. First off, lenders are reluctant to take over a deed. They don’t want to become property owners, only collect mortgages. This method is usually done when you’ve had your house listed for sale for quite a while, but still can’t sell it AND you’ve presented a case that you’re in financial hardship and can’t find any way to make payments. In those cases, the banks will consider a Deed in lieu. However, even when all these factors are present, many lenders will not agree to a deed in lieu, but it is worth a try!
- Assumption of the loan — Most loans these days are no longer assumable. The average mortgage now contains a “due on sale” clause by which the borrower agrees to pay the loan off entirely if and when they transfer the property. However, if you are facing foreclosure, you might be able to persuade your lender to modify your loan, delete this clause and allow another buyer to assume your loan. The lender may want to assess the new buyer’s qualifications, but it can be a win-win-win option for all. You might be able to negotiate a down payment from the buyer which you can use to pay off your outstanding past-due mortgage balance.
- Lease Option — This is one of my favorites, but in this scenario, the prospective buyer becomes your tenant (at first), and you continue owning the property until the buyer has saved enough down payment money, improved their credit sufficiently or sold their other home. In most situations, the buyer will make a one-time, lump option payment upfront, paying you to obtain the option to purchase your home. How does this stop your foreclosure? When this tenant pays a lump sum to buy their option, that lump could be enough to bring your mortgage current and remove the NOD. Then, you have a tenant (who has an interest in buying your property so he/she will most likely always make payments on time), who’ll pay the mortgage. Of course, in this scenario, you can’t live in the house with your tenant… but it is a very quick and easy way to stop the foreclosure AND keep your asset!
I promised a 7th way, and it’s something we’ve most likely offered to you already.
… And it’s our hassle-free cash offer program.
We can buy your house in30 days (typically)…
… And you don’t have to make a single repair…
… nor pay for closing costs or agent fees…
.. and you can even leave all your unwanted things behind.
It’s one of the easiest and quickest ways to get out of foreclosure AND get money in your pocket (if you’re not too much “underwater”)
