130th Ohio General Assembly
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H. B. No. 613  As Introduced
As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 613


Representative Anielski 



A BILL
To amend sections 2329.01, 2329.17, 2329.20, 2329.26, 2329.27, and 2329.33 and to enact sections 2330.01, 2330.02, 2330.03, 2330.04, 2330.041, 2330.05, 2330.06, 2330.07, 2330.08, 2330.09, 2330.10, 2330.11, and 2330.12 of the Revised Code to establish the Private Foreclosure Fast-Track Law.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1.  That sections 2329.01, 2329.17, 2329.20, 2329.26, 2329.27, and 2329.33 be amended and sections 2330.01, 2330.02, 2330.03, 2330.04, 2330.041, 2330.05, 2330.06, 2330.07, 2330.08, 2330.09, 2330.10, 2330.11, and 2330.12 of the Revised Code be enacted to read as follows:
Sec. 2329.01.  Lands Except as provided in Chapter 2330. of the Revised Code, lands and tenements, including vested legal interests therein, permanent leasehold estates renewable forever, and goods and chattels, not exempt by law, shall be subject to the payment of debts, and liable to be taken on execution and sold as provided in sections 2329.02 to 2329.61, inclusive, of the Revised Code.
Sec. 2329.17.  (A) When Except as provided in section 2330.08 of the Revised Code, when execution is levied upon lands and tenements, the officer who makes the levy shall call an inquest of three disinterested freeholders, residents of the county where the lands taken in execution are situated, and administer to them an oath impartially to appraise the property so levied upon, upon actual view. They forthwith shall return to such officer, under their hands, an estimate of the real value of the property in money.
(B) The municipal corporation or township in which the real property is situated may inspect prior to the judicial sale any structures located on lands subject to a writ of execution.
Sec. 2329.20.  No Except as provided in section 2330.08 of the Revised Code, no tract of land shall be sold for less than two-thirds of the value returned in the inquest required by section 2329.17 of the Revised Code; except that in all cases where a junior mortgage or other junior lien is sought to be enforced against real estate by an order, judgment, or decree of court, subject to a prior lien thereon, and such prior lien, and the claims or obligations secured thereby, are unaffected by such order, judgment, or decree, the court making such order, judgment, or decree, may determine the minimum amount for which such real estate may be sold, such minimum amount to be not less than two-thirds of the difference between the value of the real estate appraised as provided in such section, and the amount remaining unpaid on the claims or obligations secured by such prior lien.
Sec. 2329.26.  (A) Lands Except as provided in Chapter 2330. of the Revised Code, lands and tenements taken in execution shall not be sold until all of the following occur:
(1)(a) Except as otherwise provided in division (A)(1)(b) of this section, the judgment creditor who seeks the sale of the lands and tenements or the judgment creditor's attorney does both of the following:
(i) Causes a written notice of the date, time, and place of the sale to be served in accordance with divisions (A) and (B) of Civil Rule 5 upon the judgment debtor and upon each other party to the action in which the judgment giving rise to the execution was rendered;
(ii) At least seven calendar days prior to the date of the sale, files with the clerk of the court that rendered the judgment giving rise to the execution a copy of the written notice described in division (A)(1)(a)(i) of this section with proof of service endorsed on the copy in the form described in division (D) of Civil Rule 5.
(b) Service of the written notice described in division (A)(1)(a)(i) of this section is not required to be made upon any party who is in default for failure to appear in the action in which the judgment giving rise to the execution was rendered.
(2) The officer taking the lands and tenements gives public notice of the date, time, and place of the sale once a week for at least three consecutive weeks before the day of sale by advertisement in a newspaper of general circulation in the county. The newspaper shall meet the requirements of section 7.12 of the Revised Code. The court ordering the sale may designate in the order of sale the newspaper in which this public notice shall be published.
(3) The officer taking the lands and tenements shall collect the purchaser's information required by section 2329.271 of the Revised Code.
(B) A sale of lands and tenements taken in execution may be set aside in accordance with division (A) or (B) of section 2329.27 of the Revised Code.
Sec. 2329.27.  (A) When the public notice required by division (A)(2) of section 2329.26 of the Revised Code is made in a newspaper published weekly, it is sufficient to insert it for three consecutive weeks. If both a daily and weekly edition of the paper are published and the circulation of the daily in the county exceeds that of the weekly in the county, or if the lands and tenements taken in execution are situated in a city, both a daily and weekly edition of the paper are published, and the circulation of the daily in that city exceeds the circulation of the weekly in that city, it is sufficient to publish the public notice in the daily once a week for three consecutive weeks before the day of sale, each insertion to be on the same day of the week. The expense of that publication in a daily shall not exceed the cost of publishing it in a weekly.
(B)(1) Subject Except as provided in Chapter 2330. of the Revised Code and subject to divisions (B)(2) and (3) of this section, all sales of lands and tenements taken in execution that are made without compliance with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code, the public notice requirements of division (A)(2) of that section, the purchaser information requirements of section 2329.271 of the Revised Code, and division (A) of this section shall be set aside, on motion by any interested party, by the court to which the execution is returnable.
(2) Proof of service endorsed upon a copy of the written notice required by division (A)(1)(a) of section 2329.26 of the Revised Code shall be conclusive evidence of the service of the written notice in compliance with the requirements of that division, unless a party files a motion to set aside the sale of the lands and tenements pursuant to division (B)(1) of this section and establishes by a preponderance of the evidence that the proof of service is fraudulent.
(3) If the court to which the execution is returnable enters its order confirming the sale of the lands and tenements, the order shall have both of the following effects:
(a) The order shall be deemed to constitute a judicial finding as follows:
(i) That the sale of the lands and tenements complied with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code and the public notice requirements of division (A)(2) of that section and division (A) of this section, or that compliance of that nature did not occur but the failure to give a written notice to a party entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code has not prejudiced that party;
(ii) That all parties entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code received adequate notice of the date, time, and place of the sale of the lands and tenements;
(iii) That the purchaser has submitted the contact information required by section 2329.271 of the Revised Code.
(b) The order bars the filing of any further motions to set aside the sale of the lands and tenements.
Sec. 2329.33.  In Except as provided in section 2330.10 of the Revised Code, in sales of real estate on execution or order of sale, at any time before the confirmation thereof, the debtor may redeem it from sale by depositing in the hands of the clerk of the court of common pleas to which such execution or order is returnable, the amount of the judgment or decree upon which such lands were sold, with all costs, including poundage, and interest at the rate of eight per cent per annum on the purchase money from the day of sale to the time of such deposit, except where the judgment creditor is the purchaser, the interest at such rate on the excess above his the judgment creditor's claim. The court of common pleas thereupon shall make an order setting aside such sale, and apply the deposit to the payment of such judgment or decree and costs, and award such interest to the purchaser, who shall receive from the officer making the sale the purchase money paid by him the purchaser, and the interest from the clerk. This section does not take away the power of the court to set aside such sale for any reason for which it might have been set aside prior to April 16, 1888.
Sec. 2330.01.  As used in this chapter:
(A) "Agricultural property" means any tract, lot, or parcel of land on the agricultural land tax list maintained under section 5713.33 of the Revised Code.
(B) "Clerk" means the clerk of the court of common pleas of the county in which the specified residential property is located, the clerk of court of the municipal court in which the specified residential property is located, or the clerk of courts of the federal district court in which the specified residential property is located, as applicable.
(C) "County land reutilization corporation" means a county land reutilization corporation in good standing organized under section 1724.04 of the Revised Code.
(D) "Court" means the court of common pleas, municipal court, housing or environmental division of common pleas or municipal court, or federal court having jurisdiction over the specified residential property.
(E) "Designated law enforcement officer" means the sheriff or the sheriff's authorized agent or representative of the county in which the specified residential property is located, the bailiff or the bailiff's authorized agent or representative of the municipal court in which the specified residential property is located, or the marshal or the marshal's authorized agent or representative of the federal district in which the specified residential property is located.
(F) "Electing subdivision" has the same meaning as in section 5722.01 of the Revised Code.
(G) "Financial institution" means either of the following:
(1) A lender, bank, or other financial institution or its successors or assigns that owns a residential mortgage as a mortgagee and that is regularly engaged in the business of underwriting and making loans secured by real property;
(2) A financial institution or its successors or assigns that purchases mortgages from institutions described in division (G)(1) of this section whether as an assignee of the financial institution or a servicer or trustee for institutions described in this division, including a servicer of mortgages or the purchaser's successors and assigns.
(H) "Residential mortgage" means an obligation to pay a sum of money to a financial institution as evidenced by a promissory note that is secured by a first mortgage lien of a financial institution upon a residential property.
(I) "Residential property" means unoccupied property located within this state that serves as security for a residential mortgage and consists of real property that is unimproved by any building or structure or real property improved by a building or structure comprised solely of four or fewer dwelling units that are each intended for residential occupancy.
"Residential property" may include a residential condominium unit owned by any person or entity, notwithstanding the number of units in the structure of which the condominium is a part; a row house, notwithstanding the number of units of which the row house is a part; and a manufactured or mobile home that is subject to real property taxes under section 4503.06 of the Revised Code.
(J) "Unoccupied property" means any of the following:
(1) Real property that is abandoned land as defined in section 323.65 of the Revised Code;
(2) Real property on which no trade or business is actively being conducted by the owner or another party occupying the property pursuant to any lease or other legal authority;
(3) Real property that is uninhabited with no signs or active indications that it is undergoing improvements as evidenced by an unexpired building permit, an unexpired application for a building permit, or other facts indicating the property is undergoing ongoing improvements;
(4) Real property that is uninhabited and that contains one or more buildings or structures that are unsecured;
(5) In the case of real property unimproved by any building or structure, for which a visual inspection shows no exterior indications that such unimproved property serves as an immediate and active accessory use to an adjacent occupied property for such purposes as lawful parking, ingress and egress, lawful storage, or yard extension of an occupied property and that is not agricultural property;
(6) Real property on which one or more utility connections, including water, sewer, natural gas, or electric connections, are no longer servicing the property or one or more of such utility connections are not actively being billed by any utility provider to the property;
(7) Real property on which one or more buildings or structures on the property are boarded up or otherwise sealed in order to prevent the property from becoming unsecured, or because such boarding up or sealing was ordered by a governmental body pursuant to its applicable municipal, county, state, or federal nuisance authority;
(8) Real property that is condemned or otherwise declared a nuisance for any reason by a governmental body.
(K) "Unsecured" means conditions that would permit entry into a building or structure including, but not limited to, broken windows, broken doors, or other indications that the building or structure is open or vandalized.
Sec. 2330.02.  (A) In lieu of initiating foreclosure proceedings under Chapter 2329. or any other chapter of the Revised Code against residential property that secures a residential mortgage held by a financial institution, a financial institution may bring an expedited foreclosure action against an owner of a residential property as prescribed in this chapter. Such expedited foreclosure proceedings may be pursued in the courts of common pleas, municipal courts, and the federal district courts in which the residential property is located and consistent with their respective subject matter jurisdiction.
(B) By electing to pursue an action pursuant to this chapter, the financial institution shall be required to abide by the provisions of this chapter. Except as otherwise specifically authorized in this chapter, an action commenced under this chapter shall continue and conclude under this chapter. A financial institution shall not be permitted to voluntarily dismiss or seek to vacate a judgment, order of sale, writ of execution, sale, transfer, or confirmation of the action except as provided in division (B) of section 2330.04 of the Revised Code or upon written motion in the court's sound discretion for good cause shown by clear and convincing evidence.
Sec. 2330.03.  A court may adopt local rules and case management orders not inconsistent with this chapter for the purpose of implementing, as necessary, the expedited foreclosure of residential properties as prescribed under this chapter. If during the pendency of any action brought under this chapter, the court determines that the real property being foreclosed on is not, or is no longer, residential property, then such action shall not be dismissed, but shall be pursued in accordance with Chapter 2329. of the Revised Code. The court may utilize the procedures provided in Chapter 2329. of the Revised Code as the court finds convenient or necessary to supplement the court's proceedings, provided those procedures are not inconsistent with this chapter.
Sec. 2330.04.  (A) An action filed under this chapter shall be filed with the clerk in the same manner as in other civil actions. The clerk shall provide summons and notice of complaint accompanied by an affidavit prescribed in division (B)(3) of this section and subsequent hearings as provided in this section, maintain an official case file, docket all proceedings, and tax as costs all necessary expenses in connection with the action. The clerk may utilize the court's existing journal, case numbering system, and general procedures, or may maintain a separate journal, case numbering, or docketing index called the "foreclosure fast-track" docket or such similar designation to identify that filings under this chapter are intended to proceed on an expedited basis.
(B) A financial institution acting as plaintiff may initiate a foreclosure action under this chapter upon a residential property by filing a complaint with the clerk in form similar to pleading and caption forms provided in the Ohio and federal Rules of Civil Procedure, as applicable. All of the following shall accompany such complaint:
(1) The preliminary judicial report as required by section 2329.191 of the Revised Code, which includes the name and address of all parties having any interest of record in the property;
(2) A copy of the promissory note and the residential mortgage secured by the residential property. If either the promissory note or residential mortgage are not originals, then the affiant of an affidavit described in division (B)(3) of this section shall attest on personal knowledge that the promissory note and residential mortgage are true and accurate copies of the originals to the best of the affiant's good faith knowledge and belief.
(3) One of the following:
(a) The affidavit described in division (H) of this section; or
(b) An affidavit that adequately identifies the property and in which both the plaintiff and the owners of record of the property stipulate or otherwise agree that the property being foreclosed upon is to be deemed residential property as defined in section 2330.01 of the Revised Code.
(4) If the plaintiff requests that the residential property be directly transferred to a county land reutilization corporation or other electing subdivision upon the court's issuance of a decree of foreclosure, an affidavit that is signed and notarized by both the financial institution and the county land reutilization corporation or other electing subdivision that indicates that the financial institution and county land reutilization corporation or other electing subdivision are in agreement to the court's direct transfer of the residential property to the county land reutilization corporation or other electing subdivision.
The plaintiff may include other documents or information with the complaint that the plaintiff asserts is relevant to the proceeding.
If an affidavit described in division (B)(4) of this section is not filed with the complaint, the plaintiff and the county land reutilization corporation or electing subdivision may file the affidavit not later than seven days prior to any final hearing. The county land reutilization corporation or other electing subdivision may unilaterally withdraw any consent to accept any residential property by filing a supplemental signed and notarized instrument revoking the consent. The supplemental instrument must be filed not later than seven days prior to any final hearing. In the event of such revocation, the plaintiff, by filing notice to the court, may elect to proceed under this chapter or Chapter 2329. of the Revised Code or may move for a dismissal of the action.
(C) Upon the filing of a complaint under this chapter, the clerk promptly shall serve notice of the summons, complaint, and affidavit filed in accordance with division (B)(3) of this section to the last known address of the record owner of the residential property being foreclosed upon and the last known address of each lienholder or other person having an interest of record identified in the preliminary judicial report consistent with Civil Rule 4. The notice of summons shall be included with the complaint and prepared by the clerk in substantial form as prescribed in section 2330.041 of the Revised Code. The notice of summons shall inform the addressee of all of the following:
(1) That the financial institution alleges that the residential mortgage on the residential property is in default and that if so determined by the court all of the following may occur:
(a) The residential property shall be sold at public auction or transferred directly to the financial institution, a county land reutilization corporation, or other electing subdivision without appraisal and without auction sale on a date and in a manner as prescribed in this chapter or as ordered by the court.
(b) Any owner of record or any other lienholder or other party with a recorded interest in the residential property may lose all interest in the residential property, including all statutory or common law equity of redemption or other interest in the residential property, if the residential mortgage is not paid, settled, modified, or otherwise resolved by some other accord and satisfaction between the financial institution and the owner or any other lienholder or interest holder in the residential property.
(2) That any owner of the residential property, in order to redeem the property, must pay, settle, have modified, or reach an accord and satisfaction at any time before the expiration of the equity of redemption as provided in section 2330.10 of the Revised Code.
(3) That the action is being prosecuted by a financial institution and the name, address, and telephone number of the attorney for the financial institution;
(4) The case number assigned by the clerk;
(5) That all subsequent pleadings, motions, and papers associated with the case and filed by any interested party must be filed with the clerk and will become part of the case file unless a party is deemed to be in default of the proceedings as described in section 2330.05 of the Revised Code.
(D)(1) Subsequent pleadings, motions, and papers following notice of the summons, complaint, and affidavit shall be filed with the clerk and shall be served by the filing party upon all parties of record, except in the case of parties deemed to be in default of the proceedings as described in section 2330.05 of the Revised Code.
(2) Notwithstanding division (F) of this section, service by publication in any case requiring such service shall be advertised in the manner prescribed by Civil Rule 4.4 except that, if service by publication is necessary, such publication shall be made once a week for three consecutive weeks, and the service shall be complete at the expiration of three weeks after the date of the first publication. In any action brought under this chapter, if the plaintiff determines that service upon a defendant may be obtained ultimately only by publication, the plaintiff may cause service to be made simultaneously by certified mail, return receipt requested, ordinary mail, and publication. Parties served by certified or ordinary mail are not required to file an answer to the complaint. A party served by publication must appear, move, or plead to the complaint within twenty-eight days after service is completed, or such party shall be deemed in default of proceedings.
(E) Any inadvertent noncompliance with the rules in this chapter not materially affecting notice and opportunity to appear at a final hearing as described in section 2330.06 of the Revised Code shall not serve to defeat or terminate the case or subject the case to dismissal if notice or service of the summons and complaint, if challenged, can be proven by a preponderance of the evidence or are acknowledged by the party charged with notice or service. Any irregularity that materially affects notice and opportunity to appear shall be deemed waived if the party charged with notice makes an appearance in the action or makes a filing in relation to the action.
(F) Expedited foreclosure proceedings under this chapter constitute special statutory proceedings pursuant to Civil Rule 1, and as such, except for the service of process as prescribed in this chapter and in Civil Rule 4, are exempted from the Civil Rules. However, the court may utilize the procedures contained in the applicable Rules of Civil Procedure to the extent that such use facilitates the practical or efficient conduct and purposes of proceedings undertaken pursuant to this chapter, such as vacating orders, correcting clerical mistakes, and providing notice to the parties.
(G) For purposes of efficiently and promptly implementing the provisions of this chapter, the court, clerk, and designated law enforcement officer may adopt, not inconsistent with this chapter, such practice forms, forms of notice of hearings and notice to parties, forms of orders, adjudications, fees, publication forms, deed forms, and other procedures customarily within their official purview or duties.
(H) "Affidavit," as required by division (B)(3)(a) of this section, means an affidavit required to be signed and attested to either by the attorney filing the foreclosure action on behalf of the financial institution or a representative of the financial institution that based on information and belief attests to and contains the following information:
(1) That the declarant has authority from the financial institution to execute the affidavit;
(2) That the declarant has knowledge based on reasonable information and belief of the facts contained in the affidavit;
(3) That the property being foreclosed upon is residential property as defined in section 2330.01 of the Revised Code.
(4) The permanent parcel numbers and, if available, the common address of the property;
(5) An original signature by the attesting declarant;
(6) An original notarization on the affidavit by an authorized notary in this state or the state and county of such declarant's residence;
(7) The name, address, and telephone number of the individual upon whose information the declarant's information and belief is based.
Sec. 2330.041.  The notice of summons prepared by the court pursuant to division (C) of section 2330.04 of the Revised Code shall be in substantially the following form:
THIS IS A FORECLOSURE LAWSUIT BEING PROSECUTED IN THE (NAME OF COURT). YOU HAVE BEEN NAMED AS A DEFENDANT IN THIS SUIT AS SOMEONE WHO HAS AN INTEREST IN THE FOLLOWING PARCEL OF LAND:
(DESCRIPTION AS SHOWN IN COMPLAINT)
THIS PARCEL HAS BEEN INCLUDED IN AN ACTION INSTITUTED BY (NAME OF FINANCIAL INSTITUTION), BEING CASE NO. (CASE NUMBER) FILED IN THE (NAME OF COURT), (LOCATION), OHIO, ON (DATE OF FILING) SEEKING THE EXPEDITED FORECLOSURE AND SALE OR DIRECT TRANSFER OF THE PARCEL AS A RESULT OF THE ALLEGED DEFAULT OF A RESIDENTIAL MORTGAGE HELD BY THE ABOVE NAMED FINANCIAL INSTITUTION AGAINST THE PARCEL. THE ATTORNEY REPRESENTING THE FINANCIAL INSTITUTION IN THIS MATTER IS: (NAME OF ATTORNEY FOR FINANCIAL INSTITUTION), WITH OFFICES AT (ATTORNEY'S BUSINESS ADDRESS), AND A BUSINESS PHONE NUMBER OF (ATTORNEY'S BUSINESS PHONE NUMBER).
ANY PERSON OWNING OR CLAIMING ANY RIGHT, TITLE, OR INTEREST IN, OR LIEN UPON, THIS PARCEL MUST APPEAR AT ANY HEARING SCHEDULED BY THE COURT IN ORDER TO SET FORTH THE NATURE AND AMOUNT OF THE PERSON'S INTEREST AND ANY DEFENSE OR OBJECTION TO THE FORECLOSURE. ALL SUBSEQUENT PLEADINGS, MOTIONS, AND PAPERS SHALL BE FILED IN THE OFFICE OF THE UNDERSIGNED CLERK OF THE COURT, AND A COPY OF ANY SUCH PLEADINGS, MOTIONS, AND PAPERS SHALL BE DELIVERED TO THE ATTORNEY FOR THE FINANCIAL INSTITUTION ON OR BEFORE THE DATE OF ANY FINAL HEARING.
IF YOU DO NOT APPEAR AT ANY HEARING SCHEDULED BY THE COURT, A JUDGMENT OF FORECLOSURE MAY LIKELY BE TAKEN AGAINST YOU BY DEFAULT AND THE PARCEL SHALL BE ORDERED SOLD AT PUBLIC AUCTION OR TRANSFERRED DIRECTLY TO THE FINANCIAL INSTITUTION, A COUNTY LAND REUTILIZATION CORPORATION, OR OTHER ELECTING SUBDIVISION AS DEFINED IN CHAPTERS 1724. AND 5722. OF THE REVISED CODE WITHOUT APPRAISAL AND WITHOUT AUCTION SALE ON A DATE AND IN A MANNER PURSUANT TO SECTION 2330.08 OF THE REVISED CODE OR AS OTHERWISE ORDERED BY THE COURT.
THE OWNER OR LIENHOLDER OF, OR OTHER PERSON WITH A RECORDED INTEREST IN, A PARCEL MAY LOSE ALL ITS INTEREST IN THE RESIDENTIAL PROPERTY, IF THE RESIDENTIAL MORTGAGE IS NOT PAID, SETTLED, MODIFIED, OR OTHERWISE RESOLVED BY SOME OTHER ACCORD AND SATISFACTION WITH THE FINANCIAL INSTITUTION AND THE OWNER OR A LIENHOLDER OR PARTY WITH A RECORDED INTEREST IN THE PARCEL.
IN ORDER TO REDEEM THE PARCEL, THE OWNER OF THE RESIDENTIAL PROPERTY MUST PAY, SETTLE, HAVE MODIFIED, OR REACH AN ACCORD AND SATISFACTION AT ANY TIME PRIOR TO A JOURNALIZED ENTRY OF AN ORDER FOR DIRECT TRANSFER PURSUANT TO SECTION 2330.07 OF THE REVISED CODE, OR A JOURNALIZED ENTRY OF A CONFIRMATION OF SALE.
UPON THE FILING OF ANY ENTRY ORDERING THE DIRECT TRANSFER OF, OR CONFIRMING THE SALE OF, THE PARCEL, THERE SHALL BE NO FURTHER EQUITY OF REDEMPTION. AFTER THE FILING OF ANY SUCH ENTRY, ANY PERSON CLAIMING ANY RIGHT, TITLE, OR INTEREST IN, OR LIEN UPON, THE PARCEL SHALL BE FOREVER BARRED AND FORECLOSED OF ANY SUCH RIGHT, TITLE, OR INTEREST IN, LIEN UPON, AND ANY EQUITY OF REDEMPTION IN, THE PARCEL.
............................
CLERK OF THE COURT
.................. COURT
................., OHIO"
Sec. 2330.05.  (A) A party shall be deemed to be in default of the proceedings in an action brought under this chapter if either of the following occurs:
(1) The party fails to appear at any hearing after being served with notice of the summons and complaint by certified or ordinary mail.
(2) For a party upon whom notice of summons and complaint is required by publication and has been deemed served, the party fails to appear, move, or plead to the complaint within twenty-eight days after service by publication is completed.
(B) If a party is deemed in default pursuant to division (A) of this section, no further service of any subsequent pleadings, papers, or proceedings is required on the party by the court or any other party. Any valuation hearings held in accordance with section 2330.11 of the Revised Code and any other interim or ancillary hearings prior to any final hearing, and any orders, notices, or continuances shall only be required to be sent to those parties not in default. The court shall neither require nor order such further notice to one or more of such parties unless the failure to do so shall result in manifest and substantial injustice.
(C) If a party is deemed in default pursuant to division (A) of this section, the subsequent appearance, motion, or pleading of that party shall not automatically alter the status of that party as being in default. The party shall remain in defaulted status and shall not be entitled to service of subsequent pleadings, papers, and orders unless the defaulted party shows one of the following:
(1) That the failure to change the defaulted status results in, and the court so finds, a manifest and substantial injustice to one or more parties;
(2) Excusable neglect based on facts asserted with particularity;
(3) That the property in question is not residential property based on a preponderance of the evidence.
Conclusory assertions shall be insufficient to challenge a party's defaulted status under this division.
(D) With respect to any issue over a party's defaulted status, the court may conduct evidentiary hearings on the sufficiency of process, service of process, or sufficiency of service of process, in any proceeding arising from a complaint under this chapter.
Sec. 2330.06.  (A) The court shall order and conduct a final hearing on the merits of a complaint to initiate an expedited foreclosure on a residential property, including the validity or amount of any obligations under the residential mortgage, not sooner than thirty days after service of notice of summons, complaint, and affidavit has been perfected in accordance with section 2330.04 of the Revised Code, if the court determines that all of the following apply:
(1) All parties to the complaint have been served.
(2) No individual named in the complaint is on active military duty and thereby not available.
(3) The complaint, preliminary judicial report, and affidavit are before the court for the court's review.
(B) Upon the occurrence of the conditions listed in divisions (A)(1) to (3) of this section, the court shall schedule a final hearing on the merits without the necessity of any pretrials, status conferences, or other interim proceedings. If within fourteen days after the occurrence of the conditions listed in divisions (A)(1) to (3) of this section, a court does not on its own initiative order and schedule within one hundred eighty days of such scheduling a final hearing on the merits of a complaint to initiate a foreclosure as described in division (A) of this section, then the plaintiff may thereafter file a motion requesting that the court order and conduct a final hearing on the merits of the complaint, including the validity or amount of any obligations under the residential mortgage. Upon such motion, the court shall so order and conduct the final hearing not sooner than thirty days after notice of service of summons, complaint, and affidavit and not later than one hundred eighty days after the filing date of the plaintiff's request for the final hearing.
(C) Proceedings under this chapter shall be limited in subject matter to:
(1) Substantial conformity of the complaint, affidavit, and preliminary judicial report to the proceedings authorized in this chapter;
(2) Sufficiency of process and sufficiency of service of process;
(3) Whether a party is in default of any proceedings as provided in section 2330.05 of the Revised Code;
(4) The validity or amount of any obligations under the residential mortgage;
(5) Whether the property being foreclosed upon is "residential property" as defined in this chapter;
(6) Whether the mortgagor or plaintiff financial institution is in default pursuant to the residential mortgage;
(7) The priority, validity, and amount of any obligations of other lienholders to the residential mortgage. Counterclaims and cross-claims, whether normally deemed compulsory or permissive under the applicable Rules of Civil Procedure, may not be asserted in any action taken under this chapter except as to whether the financial institution is in breach of the residential mortgage or the priority and validity of lienholders listed in the preliminary judicial report. Counterclaims or cross-claims other than those provided for in this chapter may be pursued by any party in a separate action unless the court determines in its sound discretion by clear and convincing evidence that substantial justice requires inclusion of such claims.
(D) The court may make such findings of fact, conclusions of law, and orders as it determines necessary as a result of the final hearing. Before or subsequent to any decree of foreclosure, the court may order the financial institution and any other lienholders who have appeared and are not in default to stipulate to their respective order of priority, or, failing the ability to stipulate, conduct hearings and make findings to determine the order of priority.
(E)(1) A court may deem a property to be a residential property if, along with a complaint to initiate foreclosure, the record owner of the residential property stipulates or otherwise affirms in the affidavit described in division (B)(3)(b) of section 2330.04 of the Revised Code that the property is to be deemed residential property.
(2) All of the facts contained in the affidavit shall constitute prima facie evidence and shall be rebuttably presumed to be true, but may be rebutted to the court at any time prior to the final hearing if, at the time a financial institution files an action of foreclosure under this chapter, the complaint includes an affidavit as described in division (H) of section 2330.04 of the Revised Code that affirmatively asserts the property is residential property.
(3) In the case of property unimproved by any building or structure, if a party asserts an accessory use, the party making the assertion must show the existence of the accessory use by a preponderance of the evidence. Failure to assert any such accessory use by any party at least seven days prior to any final hearing as described in this section shall be deemed a waiver of any such assertion and the property shall be deemed residential property.
(F) After a final hearing, the court shall enter a decree of foreclosure under this chapter if the court determines that the information in the complaint, preliminary judicial report, copy of the promissory note and residential mortgage that secures the residential property, and affidavit as described in section 2330.04 of the Revised Code is sufficient to conclude that the mortgagor is in default of the residential mortgage and the property that secures the residential mortgage is residential property.
Sec. 2330.07.  (A) In an action for which the preliminary judicial report as described in section 2329.191 of the Revised Code states, and the court so finds, that the residential mortgage is the first and only mortgage on the residential property and the owner of the residential property is in default of the proceedings by not having appeared, moved, or pled as described in section 2330.05 of the Revised Code, the court shall enter a decree of foreclosure against the residential property and order the property either sold pursuant to division (B) of section 2330.08 of the Revised Code, or upon petition of the financial institution that filed the complaint under this chapter, transferred pursuant to division (A) of section 2330.08 of the Revised Code.
(B) In an action for which the preliminary judicial report as described in section 2329.191 of the Revised Code states, and the court so finds, that the residential mortgage is the first and only lien on the residential property and the owner of the residential property is not in default of the proceedings, then upon any finding in favor of the financial institution, whether by acknowledgment by the owner at a hearing, stipulation of the financial institution and the owner of the residential property, or upon the court's finding after a final hearing, the court shall enter a decree of foreclosure against the residential property and order the property either sold pursuant to division (B) of section 2330.08 of the Revised Code, or upon petition of the financial institution that filed the complaint under this chapter, transferred pursuant to division (A) of section 2330.08 of the Revised Code.
(C) In an action for which the preliminary judicial report as described in section 2329.191 of the Revised Code states, and the court so finds, that the residential mortgage is the first lien on the residential property but there are other liens, or interested parties of record, and the owner of the residential property and all other lienholders and interested parties are in default of the proceedings by not having appeared, moved, or pled as described in section 2330.05 of the Revised Code, the court shall enter a decree of foreclosure against the residential property and order the property either sold pursuant to division (B) of section 2330.08 of the Revised Code, or upon petition of the financial institution that filed the complaint under this chapter, transferred pursuant to division (A) of section 2330.08 of the Revised Code.
(D) In an action for which the preliminary judicial report as described in section 2329.191 of the Revised Code states, and the court so finds, that the residential mortgage is the first lien on the residential property but there are other liens, and the owner of the residential property or any other lienholder or interested party is not in default of the proceedings, then upon any finding in favor of the financial institution on the residential mortgage, whether by acknowledgement at a hearing, stipulation of the financial institution and the owner of the residential property, or upon the court's finding after a final hearing, the court shall enter a decree of foreclosure and order the residential property disposed of in accordance with one of the following:
(1) If the residential mortgage balance as determined by the court is greater than the fair market value of the residential property, the court shall order the property either sold pursuant to division (B) of section 2330.08 of the Revised Code, or upon petition of the financial institution that filed the complaint under this chapter, transferred pursuant to division (A) of section 2330.08 of the Revised Code.
(2) If the residential mortgage balance as determined by the court is less than the fair market value of the residential property, the court shall order the property sold pursuant to division (B) of section 2330.08 of the Revised Code.
To determine the fair market value of the residential property for purposes of this section, the county auditor's most recent valuation of the residential property shall be rebuttably presumed to be the fair market value of the property. The auditor's valuation is prima facie evidence of the actual fair market value, which may be rebutted to the court by any party to the action in accordance with section 2330.11 of the Revised Code.
(E) In any action described in divisions (A) to (D) of this section, if the financial institution does not petition the court for a direct transfer pursuant to division (A) of section 2330.08 of the Revised Code, regardless of the number of liens on the residential property, or if the court denies a petition for a direct transfer, the court, upon entering a decree of foreclosure, shall order the residential property sold pursuant to division (B) of section 2330.08 of the Revised Code.
(F)(1) In an action when one or more parties named as defendants in the complaint are not in default of the proceedings as described in section 2330.05 of the Revised Code and any matter justiciable under division (C) of section 2330.06 of the Revised Code is contested by one or more parties, the court may hear and adjudicate the case under this chapter, or, in its sound discretion, may hear and adjudicate the case according to the court's normal case management schedule and local rules notwithstanding the time requirements provided in divisions (A) and (B) of section 2330.06 of the Revised Code.
(2) In an action in which all of the parites named as defendants in the complaint are in default of the proceedings as described in section 2330.05 of the Revised Code, the court shall hear and adjudicate the case under the time requirements provided in divisions (A) and (B) of section 2330.06 of the Revised Code, unless the court finds specifically by clear and convincing evidence that doing so will result in manifest and substantial injustice to one or more parties.
Sec. 2330.08.  (A) Upon the issuance of a decree of foreclosure under this chapter on a residential property that the financial institution has petitioned the court to order directly transferred, and the court so orders the property directly transferred, the court shall order the designated law enforcement officer to prepare a deed without appraisal or exposure to sale to the financial institution that brought the action, a county land reutilization corporation, or other electing subdivision as indicated in the financial institution's petition. Subject to division (A)(2) of this section, the deed shall be free and clear of all liens, encumbrances, and obligations, other than unpaid taxes and assessments that may be delinquent, and such taxes and assessments that are a lien on the residential property but not yet due and payable. The order shall do the following:
(1) If the deed is prepared for the financial institution, provide that upon the financial institution's payment of all taxes and assessments and the costs of the proceedings, the designated law enforcement officer shall deliver the deed directly to the financial institution without appraisal and without sale;
(2) If the deed is prepared for a county land reutilization corporation or other electing subdivision, provide that upon the financial institution's payment of the costs of the proceedings, the designated law enforcement officer shall deliver the deed to the county land reutilization corporation or other electing subdivision without appraisal and without sale. The direct transfer of the residential property to a county land reutilization corporation or other electing subdivision shall extinguish the lien on the title for all taxes, assessments, penalties, interest, and charges delinquent at the time of the conveyance of the residential property to the county land reutilization corporation or other electing subdivision, the same as if such transfer were made to a county land reutilization corporation or other electing subdivision in lieu of taxes pursuant to section 5722.10 of the Revised Code. The financial institution shall pay for the costs of the proceedings under this division.
(B) Upon the issuance of a decree of foreclosure under this chapter on a residential property for which the court does not order the residential property directly transferred as provided in section 2330.07 of the Revised Code, the court shall order the sale of the residential property in the manner commonly performed by the designated law enforcement officer of the county in which the residential property is located except that the designated law enforcement officer need only expose such property to sale one time. Notwithstanding sections 2329.17 and 2329.20 of the Revised Code, the minimum bid at sale shall be three hundred dollars, and the residential property shall not be required to be appraised. Chapter 2329. of the Revised Code and other applicable execution statutes may be used for the disposition of the residential property, not inconsistent with this chapter.
The purchaser of the residential property at any sale pursuant to this division shall pay all current and delinquent taxes and assessments on the residential property, except when the purchaser is a county land reutilization corporation. The financial institution shall pay the costs of the proceedings under this division.
(C) The rights of the owner who owned the residential property before a sale conducted pursuant to this chapter shall remain unaffected by any excess or deficiency balance resulting from the difference between the residential mortgage balance and the sale price of the residential property pursuant to any residential mortgage.
(D) If no person bids at a sale held pursuant to this section, the financial institution invoking the provisions of this chapter shall bid in sufficient amount, up to its residential mortgage balance, to acquire the residential property. In that event, the financial institution as purchaser, or its successor or assigns at any sale, shall pay all current and delinquent taxes and assessments on the residential property and the costs of the proceedings under this chapter.
Sec. 2330.09.  (A) The court shall prescribe deed forms and issue orders of sale or orders of transfer as authorized in division (C) of section 2327.02 of the Revised Code. The order of sale, order of transfer, and deed forms and the description of the residential property shall be ordered by the court so that at the time of deed delivery to any party that obtains residential property through direct transfer or sale as described in section 2330.07 of the Revised Code, the designated law enforcement officer need only sign the deed and deliver the deed upon the payment of all applicable purchase proceeds, costs, taxes, and assessments, as applicable.
(B) By filing an action under this chapter, the plaintiff authorizes and consents to the designated law enforcement officer filing the deed, which shall constitute deed delivery.
Sec. 2330.10.  (A) Notwithstanding section 2329.33 of the Revised Code, a party entitled to redeem a residential property after a decree of foreclosure is issued under this chapter shall do so within the following time periods:
(1) In the case of a direct transfer made pursuant to section 2330.07 of the Revised Code, prior to the journalized entry of the order to transfer, which may be included in the decree of foreclosure or in a separate order to so transfer pursuant to a decree. In the case of such a direct transfer, no further action of the court shall be required after entry of the order, at which point any statutory or common law equity of redemption in any owner shall be deemed forever and entirely extinguished.
(2) In all other actions brought under this chapter, on or before confirmation of sale, after which any statutory or common law equity of redemption in any owner shall be deemed forever and entirely extinguished.
(B) Upon the expiration of the time periods prescribed in this section, a transfer to any transferee shall vest free and clear fee simple title to the transferee free of all liens, encumbrances, or charges in equity or law, except easements and restrictions of record running with the land.
Sec. 2330.11.  (A) For purposes of rebutting the presumption of fair market value when value is rebuttably presumed pursuant to division (D)(2) of section 2330.07 of the Revised Code, at any time after the filing of the complaint, or upon the court's own motion, but in no event later than fourteen days prior to any final hearing, any party may file with the court a good faith appraisal of the residential property from a licensed professional appraiser and request a hearing to determine the fair market value of the residential property. Any party may file additional appraisals to refute or confirm any appraisal submitted by another party. An appraisal shall not be submitted for any purpose other than to rebut the presumption of value determined pursuant to division (D)(2) of section 2330.07 of the Revised Code and any appraisals in response to that determination.
(B) If proceedings on valuation require additional time beyond that prescribed in this chapter, the court may proceed with the case on its standard case docket as prescribed in division (F) of section 2330.07 of the Revised Code, except that the court shall dispose of the case as authorized in divisions (A) to (D) of section 2330.07 and section 2330.09 of the Revised Code as applicable, depending on the determination of fair market value and to the extent such determination impacts the applicability of those divisions and that section.
Sec. 2330.12.  (A) Unless otherwise specifically prohibited by the residential mortgage or a specific statutory provision of law, a financial institution that has filed an action under this chapter may enter into a residential property to secure and protect it from harm if the property is unsecured.
(B) If entry as described in division (A) of this section is prohibited by the residential mortgage documents or related contractual documents, then, in the interest of public safety, the court may authorize entry for such purposes by order either upon petition or upon the court's own motion.
(C) A financial institution shall not be subjected to criminal or civil liability for trespass, unauthorized entry, invasion of privacy, building or housing code violations, or other responsibility for the condition of the residential property due to an entry authorized pursuant to division (A) of this section. This section does not affect a financial institution's duties to use ordinary care that existed prior to the effective date of this section under the common law.
(D) In the event of an entry described in division (A) of this section, the financial institution shall not be deemed to be a mortgagor-in-possession of a residential property under any statute or common law. The securing of the residential property including the changing of locks and restricting access shall not be considered as exercising any dominion, control, or the right of either over the property so long as at the time of the entry, an action under this chapter was filed and pending.
Section 2.  That existing sections 2329.01, 2329.17, 2329.20, 2329.26, 2329.27, and 2329.33 of the Revised Code are hereby repealed.
Section 3. Chapter 2330. of the Revised Code is intended to provide an alternative basis for filing foreclosures by financial institutions against residential property secured by a residential mortgage. Because this alternative statutory procedure is intended to expedite the foreclosure of unoccupied, often blighted, residential property by providing a more expedited procedure than that afforded by other available foreclosure actions, Chapter 2330. of the Revised Code shall be known as the Private Foreclosure Fast-Track Law.
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