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Banking & Finance Law Report

Tag Archives: Foreclosure Procedure

Significant Changes to Ohio Foreclosure Law Proposed

Posted in Collection and Foreclosure, Ohio Law

Legislation has been introduced in the Ohio House that would amend Ohio’s foreclosure law in a manner favorable to licensed auctioneers and realtors and unfavorable to county sheriffs and appraisers. As set forth below, House Bill 586 would, among other things, permit “private selling officers” to conduct judicial sales of real property; permit written or electronic bidding; eliminate the requirement that judgment creditors or lienholders who appear in an action pay deposits and eliminate the three-freeholder appraisal. The bill was introduced on June 17, 2014, and proposes amendments to O.R.C. §§2329.151, 2329.17, 2329.18, 2329.19, 2329.20, 2329.271, 2329.28, 2329.34, and 2329.39 and would enact new sections 2329.152 and 2329.311.

R.C. §2329.151 would be amended to permit goods and chattels levied upon execution to be sold by a licensed auctioneer who is a resident of the state and would permit sales of land upon execution to be auctioned by a “private selling agent”, defined at R.C. §2329.152(H) as a state resident who is both a licensed auctioneer under R. C. Chapter 4707 and a real estate agent under R. C. Chapter 4735.…


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Ohio Foreclosure Procedure . . . Twice the Appeal

Posted in Collection and Foreclosure, Ohio Law, Real Estate

Earlier this month the Supreme Court of Ohio resolved a split of authority between the Fifth District and Seventh District regarding whether a foreclosure decree is a final appealable order when it includes unspecified amounts advanced by the mortgagee for inspections, appraisals, property protection and the like. Prior to the May 15 decision in CitiMortgage, Inc. v. Roznowski1, it was unclear whether a judgment decree of foreclosure – which typically includes unspecified amounts that may be advanced by the mortgagee prior to confirmation of the foreclosure sale for inspections, appraisals, property protection and maintenance – is a final appealable order, or whether a foreclosure defendant must wait until after the property has been sold at sheriff’s sale and the order of confirmation of sale issued before he or she may appeal.

The Supreme Court of Ohio’s decision in the CitiMortgage case establishes that there are two separate opportunities for appeal. The first opportunity arises after the trial court issues a judgment decree of foreclosure. The Court found that as long as the foreclosure decree addresses the rights of all lienholders and the responsibilities of the mortgagor – regardless whether all exact amounts for which the mortgagor is liable are set forth in the judgment order, such as interest and protective advances made or to be made by the mortgagee – the foreclosure decree constitutes a final appealable order. A party appealing a foreclosure decree may challenge “the court’s decision to grant the decree of foreclosure” and once that …


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Ohio Supreme Court to Address Issues Arising in Schwartzwald’s Wake

Posted in Collection and Foreclosure

As all professionals whose business involves the prosecution of foreclosures in Ohio almost certainly know by now, the Ohio Supreme Court’s decision in Fed. Home Loan Mortg. Corp. v. Schwartzwald1 provided that the foreclosing plaintiff must have standing to bring the action at the time the plaintiff files the complaint. Typically this requires the claimant to be the holder of the note and mortgage at the time it files its foreclosure complaint. The substance of the court’s holding in Schwartzwald does not leave much room for interpretation, but the actual application of the decision in practice has led to a number of procedural questions and disputes. The Supreme Court of Ohio has again stepped up and agreed to hear two specific cases where the district courts of appeal have rendered differing standards.

The first question involves the extent to which proof of standing needs to be offered at the time of filing the complaint, arising out of Wells Fargo Bank, N.A. v. Horn.2 The issue in dispute in Horn relates to whether the foreclosing plaintiff need affirmatively prove its standing at the time of filing the complaint – in other words, whether sufficient documentation needs to be attached to the complaint in order to establish standing at the time of filing, rather than having to meet that burden at a later time during the proceedings. The Eighth and Tenth District Courts of Appeal have ruled that although standing does need to exist at the time the complaint …


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Ohio Supreme Court Frowns On Constructive Notice Via Website Of Sheriff’s Sale

Posted in Real Estate

On May 17, 2012, this blog reported on the oral arguments in PHH Mortgage v. Prater, a case from Clermont County, Ohio regarding the extent to which an internet website may (or may not) be constitutionally adequate notice of a sheriff’s sale.

Yesterday, the Ohio Supreme Court issued a unanimous opinion in favor of the mortgage company, reversing the court of appeals and holding that “constructive notice by publication to a party with a property interest in a foreclosure proceeding via a sheriff’s office website is insufficient to constitute due process when that party’s address is known or easily ascertainable.”

The Court’s opinion, authored by Justice Evelyn Lundberg-Stratton (who will retire at the end of this year), discusses precedent from the U.S. Supreme Court (Mullane and Mennonite Bd. of Missions) and the Ohio Supreme Court (Central Trust Co.), as well as more recent authority from the United States District Court for the Eastern District of Michigan (McCluskey v. Belford High School, E.D. Mich. No. 2:09-14345, 2010 WL 2696599 [June 24, 2009]) to conclude that the sheriff’s internet notice procedure impermissibly “shifts the burden of notification from the sheriff’s office to the persons to whom the notice is directed. *** While we understand the interest in using technology to conserve resources, we find that notice by Internet posting is more akin to publication in a newspaper, and due process demands more in this instance.” PHH Mortgage, 2012-Ohio-3931, ¶ 16.…


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Ohio Supreme Court to Hear Oral Arguments Regarding Adequacy of “Website Notice” of Sheriff Sales

Posted in Real Estate

On May 23, the Ohio Supreme Court will hear oral arguments in an appeal by PHH Mortgage Corporation that concerns whether a sheriff’s website can provide constitutionally sufficient notice of the date, time, and location of a sheriff’s sale of foreclosed property. Real estate lenders of all sorts will be interested in the outcome which has important implications for foreclosure proceedings.

Nearly two decades ago, in Central Trust Co. v. Jensen, 67 Ohio St.3d 140 (1993), the Supreme Court held that notice by mail or other “equally reliable” means is a constitutional prerequisite to a proceeding that adversely affects a party’s property interests, when the interest holder’s address is known or easily ascertainable. The PHH Mortgage Corp. case tests that principle in the Internet age.

In PHH Mortgage, the mortgage company (“PHH”) filed a foreclosure action in April 2008, and the trial court’s final judgment in favor of the company was entered the following September. The property was then to be sold through the Clermont County Sheriff’s Office. On three occasions in 2009, the order of sale was withdrawn. On each of these occasions, PHH was notified by mail of the date and time for the sale. The trial court scheduled a fourth sale for April 2010. But PHH did not receive notice by mail of this sale, because at some point before then the sheriff’s office (due to budget constraints) had stopped sending notice by mail of upcoming sales, and began publishing the sale dates on its website. So, even though PHH intended to bid on …


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