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H. B. No. 613 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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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.
............................
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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