It has been over a month since the fast track foreclosure bill took effect in Ohio law. This was one of five policy considerations for improving Ohio’s housing market and was specifically designed to cut down foreclosure timelines from years to as low as six months.
In DS News’ previous coverage of this topic, we discussed how Ohio lawmakers fought to pass this legislation because of the problems caused by vacant and abandoned properties have gained national attention in the last couple of years. Reducing the foreclosure timeline should cut down on problems presented by vacant properties such as the spreading of blight, lowering of property values, vandalism, squatters, and violent crime that these properties often attract.
This bill was initially proposed by Columbus City Attorney Rick Pfeiffer three years ago, and was introduced to the Ohio Senate in June 2013 by Ohio Rep. Cheryl Grossman (R-Ohio) and Ohio State Rep. Michael Curtin (D-Ohio).
The bill passed unanimously in the Ohio House in April 2014, but in December 2014 an amended version of the bill failed to make it out of the Ohio State Senate Finance Committee. A new version of the bill, Ohio HB 134, was then introduced in early 2015 by the same two joint sponsors, Grossman and Curtin. That bill passed by a vote of 88-0 in the Ohio House of Representatives in November 2015, and took another six months to pass in the Senate. Now, five months later, this bill has become effective throughout the state of Ohio.
Now, the Federal Reserve Bank of Cleveland reports that community development experts say the success of the new fast-track option depends on how it is implemented.
“The concept is good, the theory is good,” said Paul Kaboth, VP of the Community Development Department at the Federal Reserve Bank of Cleveland in their report. “But if it’s implemented poorly, then the results will be poor. There are parts of this change in Ohio law that depend on the local county, and if the local county or the local foreclosure folks ignore this, then foreclosures of vacant properties won’t speed up.”
In the report the Cleveland Fed says that their researchers determined in 2014 that fast-track foreclosures for vacant properties could eliminate tens of millions of dollars of annual deadweight losses in Ohio and Pennsylvania.
“On one level, we’re looking to see that the law does what its intent is, to speed foreclosures of vacant property,” says Kaboth. “Then, we need to identify unintended consequences from the implementation of the law.”