As Martin Andelman points out, reports of the death of the foreclosure crisis have been greatly exaggerated. According to Bankrate.com, foreclosure filings in Ohio were up by six percent at the end of 2014. According to Bankrate, 1 out of every 872 houses in Ohio received a foreclosure filing through December of 2014. At the Dann Law Firm we have seen a similar rise in new clients facing foreclosure over the past several months.
Since the decision of the Ohio Supreme Court in Bank of America v. Kuchta, retaining a lawyer early in the foreclosure process is more important than ever in Ohio. In Kuchta, the Ohio Supreme Court severely limited the circumstances under which a homeowner in foreclosure, or a litigant in any lawsuit for that matter, can attempt to challenge a judgment of an Ohio Common Pleas Court after it has been rendered. The Court’s theory is that someone who is sued for foreclosure in a judicial foreclosure state, such as Ohio, should understand that when they receive personal service or certified mail from the Clerk of Courts they have 28 days to answer a complaint for foreclosure as they should have sufficient notice to step up and defend the case or to hire a lawyer experienced in representing homeowners to do it for them.
What the Supreme Court failed to understand is that many homeowners and borrowers think that just because they are in default, that they have no potential defense to a foreclosure filing. For example, in the Kuchta case itself the Court acknowledged that at the time Bank of America sued the Kuchtas they had no right to sue them, but they said that they forfeited the chance to make that argument by not raising it specifically enough before they retained our firm to represent them. The Kuchtas, like many homeowners faced with foreclosure, were focused on trying to work out a modification of their loan with the bank and not focusing on highly technical legal and jurisdictional arguments.
That is why it is critical that someone in Ohio who is in default on their mortgage loan, and particularly anyone who has been served with a lawsuit for foreclosures, pay attention to both the legal issues and defenses they need to raise directly in court and work with their loan servicer to find a smart and reasonable solution to their problems.
New Federal Regulations provide additional protections and avenues for homeowners who fall behind on their mortgage but wish to stay in their homes. At the Dann Law Firm we have now filed 5 lawsuits against mortgage loan servicers who have violated Federal Regulations X and Z which are now just over one year old, and we anticipate filing more in the future. These regulations require quick disclosure of information critical to understanding and defending a foreclosure and, most importantly, set strict timelines and rules of conduct for mortgage loan servicers who undertake to modify an individual’s home loan.
For a family facing foreclosure, it is critical to retain a lawyer who understands both the potential state law defenses to the foreclosure complaint itself and the rights of borrowers under these new federal regulations, because the intersection of these two laws create a much better opportunity for a positive outcome for those homeowners.