If you find yourself facing foreclosure (or even threatened by the prospect of it), it’s absolutely critical to understand how the foreclosure process works in Ohio.
Understanding the Foreclosure Process in Ohio
What is foreclosure anyway?
Foreclosure is a term that most homeowners dread hearing, yet it is a reality that many face at some point in their lives. Foreclosure is a legal process in which a mortgage lender attempts to take back a property secured by a loan, usually after a borrower stops making payments. While foreclosure can be a daunting and overwhelming process, it is not the end of the world, especially if you understand how foreclosure works in your state. In this article, we will take a closer look at how foreclosure works in Ohio and what steps you can take to navigate the process successfully.
By no means is foreclosure fun, but it’s not the end of the world.
Stages of the Foreclosure Process
The foreclosure process in Ohio, like in most states, varies depending on whether the state uses a judicial sale or power of sale. The judicial foreclosure process involves the lender filing a lawsuit in court, with the court then demanding payment from the borrower. The borrower has 30 days to pay the overdue amount to avoid foreclosure. If payment is not made, a judgment is entered, and the lender can request the sale of the property through an auction. After the property is sold, the local sheriff serves an eviction notice, and the borrower must vacate the property.
Connect with us through our contact page or by calling us at (877) 853-3400 to have us walk you through the specific foreclosure process here in Akron.
On the other hand, the power of sale foreclosure process does not require court intervention. Instead, the lender serves the borrower with a notice demanding payment, and the court is not required, although there may be some level of judicial review. After the waiting period, a deed of trust is drawn up, and the control of the property is transferred to a trustee. The trustee can then sell the property to the lender at a public auction.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- You’ll have 30 days to bring payment to court to avoid foreclosure (sometimes that can be extended).
- If you don’t pay after this period, a judgement will be entered and the lender can request the sale of your property – generally through an auction.
- Once the property is sold, the local sheriff serves an eviction notices and you must vacate the property.
Under Power of Sale (Non-Judicial) Foreclosure:
- The lender serves you with a notice demanding payment, and the courts are not required – although there may be some level of judicial review.
- After the established waiting period has gone by, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trusteed can then sell your property to the lender at a public auction (notice must be given).
So, What Happens After A Foreclosure Auction?
After the foreclosure auction, the amount of the loan is paid off with the proceeds from the sale of the property. However, if the sale of the property is not enough to pay off the loan, a deficiency judgment can be issued against the borrower. A deficiency judgment is where the bank gets a judgment against the borrower for the remaining funds owed to the bank. Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of the sale, while others allow the full loan amount to be assessed.
Sometimes, if the sale of the property isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower. A deficiency judgement is where the bank gets a judgement against you, the borrower, for the remaining funds owned to the bank.
Some states limit the amount owed in a deficiency judgement to the fair value of the property at the time of the sale, while other states will allow the full loan amount to be asssesed.
Here’s a great resource that lists the state by state laws when it comes to deficiency judgements.
Generally, it’s best to try to avoid a foreclosure auction. Instead, call up the bank to negotiate, or work with a local, reputable real estate firm like us at Greater Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced invested can help you by negotiating directly with the banks – or even eliminate the prospect of a foreclosure, even if your home is worth less than you owe.
If you are facing foreclosure and need to sell your property quickly in Akron, Ohio, we can help. At Greater Buyers, we buy houses in Akron, Ohio, from people who need to sell fast. We can help negotiate with the bank or offer you a cash sale to help you avoid foreclosure. Give us a call at (877) 853-3400 or fill out our quick form to get started today.
We buy houses in Akron, Ohio like yours from people who need to sell fast!