Ohio Supreme Court limits foreclosure filings

November 1, 2012 by · Leave a Comment
Filed under: Legal News 

It is absurd that the courts before this, the lower courts were granting foreclosures without the proper paperwork.  Regardless off statute of limitations issues, it is obvious looking back that major misconduct, including fraud happened on the part of homeowners and lenders to be fair.  The difference is the lenders were offering the credit and in their rush to make the billions in fees that the entire industry reaped during the “go-go” years, they didn’t set aside time to file the proper paperwork to secure their title to many homes. 

We as the taxpayers stood behind the banks in backing them from insolvency, that was for their favor.   Now, in cases were it shows lenders or subsequent title holders can not produce paperwork, showing legitimate claim on the house.   This should fall in the current homeowners favor.  It can break either way when people are greedy.   If you do not allow this to happen, you really start to show a skewed American system where the big boys get protected from both ends and the little people get taken for a ride on both ends (no pun). 

The Columbus Dispatch –  In a decision praised as a safeguard for homeowners in trouble, the Ohio Supreme Court ruled yesterday that lenders can’t file foreclosure cases until they have the proper paperwork in hand.

The ruling will stop the practice of some foreclosures being granted even though lenders failed to produce vital documentation, said one lawyer who specializes in such cases.Common pleas courts cannot hear foreclosure cases unless they are filed by the lender holding the mortgage interest in the property, the justices said in a unanimous ruling.

And, the problem is not erased simply by later filing the proper documentation before a judge’s decision, the court ruled.The ruling reversed the 2nd District Court of Appeals in a decision in a Greene County case that conflicted with two other appellate rulings on the need for the “real party of interest” to be part of foreclosure filings.

In the case, the Federal Home Loan Mortgage Corp. filed a foreclosure case against a Xenia couple who had defaulted on their loan. The filing occurred before a bank had signed over the mortgage loan to “Freddie Mac.”

The couple sued, in part, because they had arranged a short sale of their home with the bank and had found a buyer before the filing of the foreclosure action.  “It has been very common practice for banks to file foreclosure cases before the technical requirements of the transfer of note and mortgage has been completed,” said Andrew Engel, a Centerville lawyer representing the former Xenia couple.

“This ruling does provide additional protection because it will require the banks to get their paperwork in order before they file suit,” he said.  The practice of filing foreclosures without holding the loan paperwork has subsided in the past two years because of a pair of appellate-court rulings finding it illegal, he said.

The ruling might allow a limited number of people who lost their homes to return to court and ask that the foreclosure ruling against them be set aside, Engel said.

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