With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Ohio anyway?
Many homeowners across America and Ohio are facing difficulties making their monthly mortgage payments.
Foreclosure is a legal process that lenders use to take back a property when the homeowner falls behind on mortgage payments. In Ohio, the foreclosure process typically begins after several months of missed payments, leading to what is commonly called the “pre-foreclosure” phase. Understanding exactly what is a foreclosure in Ohio can help homeowners take steps to protect their property and financial stability.
Understanding the Pre-Foreclosure Warning Period in Ohio
When a homeowner in Ohio misses about three to six months of mortgage payments, the lender will issue a formal warning.
This notice informs the homeowner of the outstanding balance and urges them to pay or face the possibility of losing their home. This crucial period, referred to as pre-foreclosure, provides a window for homeowners to catch up on payments or negotiate with the lender to prevent a full foreclosure.
During pre-foreclosure in Ohio, homeowners have several options that can help them avoid foreclosure. They may be able to arrange a loan modification to lower their payments, negotiate a temporary forbearance, or establish a repayment plan. The primary goal of pre-foreclosure is to resolve the debt without repossession of the home, as lenders generally prefer repayment over foreclosing on a property. Taking advantage of these pre-foreclosure options can help homeowners avoid the serious credit damage and financial strain that come with a foreclosure on their record.
Ohio’s Judicial Foreclosure Process: What Homeowners Need to Know
If the homeowner is unable to resolve the outstanding debt in pre-foreclosure, the lender may move forward with the foreclosure process.
Ohio is known as a judicial foreclosure state, meaning foreclosures in Ohio must go through the court system. Once the lender files a formal complaint with the court, a Notice of Default (NOD) or Lis Pendens is typically issued. This legal notice alerts the homeowner and the public that the foreclosure process has begun and that the property may be repossessed and sold.
Homeowners in Ohio who receive a Notice of Default still have options to prevent a foreclosure. Ohio’s judicial foreclosure process allows homeowners to present their case in court, which may result in more time to arrange an alternative solution. They may still be able to work out an agreement with the lender, sell the property, or pursue a short sale to avoid foreclosure. The judicial foreclosure process in Ohio can take several months, providing time for the homeowner to either resolve the situation or prepare for the property to be auctioned.
Understanding Ohio’s Foreclosure Auction and Deficiency Judgment Process
Once the court grants the lender permission to proceed, the property may be sold at a public auction. In Ohio, the proceeds from this sale are used to pay off the remaining mortgage balance. If the sale amount does not cover the debt, the homeowner may be responsible for the remaining balance, known as a deficiency judgment. This post-foreclosure outcome highlights the importance of taking action early to avoid the potential financial repercussions of foreclosure.
Note: It is important to keep in mind when learning what is a pre-foreclosure in Ohio that banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Ohio mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Ohio like us at Property Peace, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Ohio area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Ohio area house – We buy houses in Ohio and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources. There is is no reason for you to not to equip yourself with the knowledge of what is a pre-foreclosure in Ohio.