Foreclosure Moratoriums

Foreclosure is the legal process through which a lender can use to repossess your home or commercial property. When your lender forecloses on your property, the lender can cause the Sheriff to sell your property at a publicly auctioned foreclosure sale. In Ohio, your property can be sold for two-thirds of the appraised, fair market value. If your property is sold for less than the total amount you owe on your mortgage loan, a deficiency judgment could be entered against you and collected from your personal assets or garnished from your wages.

If your property is in danger of being foreclosed, there are numerous things you can do to help prevent foreclosure. Do not ignore the problem. Contact your lender as soon as you realize there may be a problem. Many lenders offer home owner assistance programs to help prevent foreclosures.

In response to political pressure and numerous press reports on the foreclosure crisis in America, many of the nation's largest banks have announced temporary foreclosure moratoriums for residential properties. In addition, Freddie Mae and Freddie Mac, now owned by the federal government, have announced a temporary foreclosure moratorium. These banks will halt some foreclosure proceedings while the United States Treasury Department announces and implements a foreclosure prevention plan including loan modification programs. Most of these programs apply if the homeowner is seeking to stay in the house, is working in good faith with the lender, and is able to make payments under a loan modification program.

In addition, there are many strategies available to help prevent foreclosure or, if you are already in foreclosure, to resolve foreclosure. If a mortgage modification program is not acceptable to the lender or is otherwise not available, there are other options.

For example, some lenders will work with property owners to accept a "deed in lieu of foreclosure." This requires the property owner to give the house back to the bank in exchange for the bank forgiving the loan.

Other lenders may agree to accept a "short sale" which would allow the lender to accept less than what is owed on the property if a qualified, good faith buyer exists.

Other lenders may accept a qualified buyer taking over the mortgage and taking title to the property.

Finally, some lenders have engaged in foreclosure practices which may be in violation of your rights as a consumer, home owner or mortgagor.

If you suspect that your rights have been violated or you require assistance with preventing or resolving a foreclosure of your house or commercial properties, please contact David M. Cuppage, Scott D. Simpkins or Margaret M. Metzinger at (216) 621-8484.