Guide to Deed in Lieu of Foreclosure: Ohio
What is a Deed in Lieu of Foreclosure?
A deed in lieu of foreclosure in Ohio is one of many options you have when you simply can’t afford your mortgage payments anymore. Apart from selling your property, considering a short sale, filing for bankruptcy, or going through with a foreclosure, you may decide to under a deed in lieu of foreclosure in Ohio. A lender must also approve this action, and the ultimate decision will be reached in a foreclosure mediation within an Ohio court.
A deed in lieu of foreclosure allows you to hand your property over to the lender and walk away mostly free of payments for your former property. However, you shouldn’t jump to filing for a deed in lieu of foreclosure in Ohio right way. There are many options you can discuss with your real estate attorney, and there are many situations a judge will listen to within mediation. A judge may give you leniencies on your mortgage payment depending upon the following situations:
1) Injury or Illness
2) The rate of your Adjustable Rate Mortgage (ARM) within the last couple of years
3) The time period of your Balloon Payment (a loan that must be paid in whole within a specified date or end of a certain period)
4) When expenses have become greater than your income due to a number of conditions.
General Laws Surrounding a Deed in Lieu of Foreclosure
There are some laws that are unique to Ohio, but some laws apply federally. The U.S. Department of Housing and Urban Development (HUD) orders statutes on a federal level, and some of the laws concerning a deed in lieu of foreclosure in Ohio and other states fall below:
1) If a mortgager has been approved for a deed in lieu of foreclosure (DIL), they only have 90 days to complete the process and transfer the title over to the lender company. This time period of 90 days starts immediately after the lender gives approval for a DIL.
2) HUD mandates that a mortgager may receive up to $2,000 for junior liens and/or for vacating the home or property within the specified time period.
3) A mortgagee may revert from the foreclosure process to the DIL process if their Quality Control Plan shows the procedure is good for both the lender and mortgagor.
Important Laws for Deed in Lieu of Foreclosure in Ohio
The state of Ohio has a few laws that protect the homeowner (or former homeowner) in certain cases.
For example, within the state of Ohio, a homeowner can mediate certain issues such as what date to turn over the property, what date to move out, and what other obligations may exist. Some of these guidelines can override federal law if the agreements are compiled in a written agreement that meets the requirements of the Ohio Revised Uniform Mediation Act, Section 2710.05 Exceptions to Privilege—Partial Admission or Nonprivileged Communication. After the agreement has been formalized, the lender will normally file a motion to dismiss the case without prejudice.
