Ohio’s Proposed Legislation for Mandatory Foreclosure Mediation

by Larry R. Rothenberg, Esq.

On October 6, 2009, House Bill 306 was introduced into the Ohio House, proposing mandatory mediation in all foreclosures on residential structures in the state, with the following exceptions:

  • Foreclosures based on delinquent taxes;
  • Foreclosures in which the homeowner fails to answer the summons within 28 days after its issuance; and
  • Foreclosures that are not residential properties occupied by the owner or a tenant of the owner

The bill would require an additional filing fee of $500 for residential foreclosures, to provide funding for the mediation program.  The summons issued by the clerk of courts in a foreclosure on a residential property other than for delinquent taxes, would include a notice regarding the mediation procedures.  Upon receiving an answer by the homeowner, the clerk of courts would schedule the mediation to be held within 60 days, and at the request of the mediator, the first mediation meeting may be held by telephone. 

Currently, many Ohio counties already have individual mediation programs, in which a mediation is scheduled only if requested by the borrower.  Under the proposed bill, unless the case falls within one of the exceptions, mediation will be mandatory – even if not requested by the borrower. 

On May 20, 2009, the Democrat-controlled Ohio House passed a bill, which is currently stalled in the Ohio Senate, that would implement a six-month moratorium on foreclosures on occupied residential properties, and would impose a non-refundable additional fee of $750 to be paid by the mortgage holder, to be used for foreclosure prevention assistance.  That bill would also require a sixty-day pre-foreclosure notice and additional record keeping requirements for mortgage servicers.  With the moratorium bill stalled in the Republican-controlled Ohio Senate, the new bill requiring mandatory mediation presents an alternative approach.

We will keep you advised of further developments.  For a complete copy of proposed House Bill 306, go here.

If you have any questions on this information, please contact Mr. Larry R. Rothenberg, Esq. Larry is the partner-in-charge of the Cleveland real estate and foreclosure department of Weltman, Weinberg & Reis Co., L.P.A. He is the author of the Ohio Jurisdictional Section contained within the treatise, “The Law of Distressed Real Estate”, published by The West Group. The firm handles foreclosures and related litigation throughout Ohio, Kentucky, Indiana, Illinois, Pennsylvania and Michigan. Larry can be reached at (216) 685-1135 or via e-mail at lrothenberg@weltman.com.   

Client Advisory is published by Weltman, Weinberg & Reis Co., L.P.A .  For over 75 years, we have been providing comprehensive creditor representation and legal services to clients. Our approach integrates the filing of legal action with our recovery activity anywhere a debtor or debtor’s assets may be located. We coordinate the handling of files personally throughout our footprint states of Illinois, Indiana, Kentucky, Michigan, New Jersey, Ohio and Pennsylvania, or through our national attorney network. When it comes to creditor representation at WWR, we get it.

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