By providing another tool to fight and prevent community blight, Ohio lawmakers have set an example their counterparts in other states would do well to follow.
Groundbreaking language recently approved by the Ohio Legislature finally establishes a fast-track process for mortgage foreclosures on vacant and abandoned property. The provisions are part of a larger bill that was signed by Gov. John Kasich on Tuesday, June 28.
With the new law, Ohio becomes one of only a dozen or so states to enact some form of fast-track foreclosure for vacant and abandoned properties. Similar bills are pending in New York and Pennsylvania.
In the nearly three years it took Ohio to enact fast-track foreclosure legislation, untold numbers of vacant and abandoned properties continued to cause blight in communities across the Buckeye State. That’s because Ohio’s outdated foreclosure requirements, like those in many states, often cause vacant and abandoned properties to sit empty for two years or more and become “zombie homes” that no one has any incentive to maintain.
State Rep. Cheryl Grossman, a longtime proponent of a fast-track process on abandoned properties, pointed out, “We heard examples of it taking up to three and a half years to take care of a blighted property. What happens in that scenario is any neighbors in that neighborhood that maintain their homes have to deal with a boarded-up home. It certainly decreases property values, and then crime occurs there on a very frequent basis.”
The industry-changing Ohio legislation accelerates the foreclosure process to as little as six months in prescribed situations—thus enabling the mortgage servicer in many cases to get possession of the property before it deteriorates, nipping blight in the bud and offering greater hope of rehabilitation and marketability.
Fast-tracking gives banks the opportunity to foreclose and market a property while it is in at least somewhat good condition, which is in the best interests of both the banks and the community.
In addition to expediting the foreclosure process, the Ohio law includes a number of other provisions designed to protect properties and make the process more efficient. Of particular note, it seeks to prevent “trashing” of properties by creating criminal mischief liability for a homeowner who destroys his property after being served with a summons and complaint in a foreclosure action.
The law clarifies the current process permitting judgment creditors to ask a court to allow the use of a “private selling officer” instead of the county sheriff in the process to sell the property. It also maintains the appraisal process with the county sheriff but provides alternatives if the sheriff’s appraisers don’t return the appraisal within 21 days.
Sheriffs will also be required to participate in an online sheriff sale website that will be established to help make the process more transparent and efficient. And under certain circumstances, a local municipality will have the ability to request a sale of property if it has been on the docket longer than 12 months.
Having devoted more than 25 years to the property preservation industry, I have seen firsthand the devastating impact of community blight. I congratulate the members of the Ohio Legislature for being proactive in the effort to cure it.
Unfortunately, their authority stops at the state line. The challenge now is for lawmakers in other states to review the effectiveness of their foreclosure processes and act with similar farsightedness if necessary.