Cleveland Bankruptcy Lawyer Blog

There may be hope on the horizon for Cleveland homeowners. Cleveland, Ohio was cited in the November 2008 issue of SmartMoney Magazine as one of twenty-five major cities in the United States that is poised to see its housing market rebound. Part of the reason is that Cleveland "sat out" the skyrocketing home prices seen in other major cities across the U.S. that are now coming back to haunt those markets.

Cleveland ranked fifth on SmartMoney's list of twenty-five major cities. As the credit freeze begins to thaw, interest rates fall and people are once again able to refinance, there may be light at the end of the tunnel. Despite this positive news, however, Cleveland and Ohio are still experiencing a significant rise in the number of bankruptcies filed, which include many homeowners for whom this rebound comes too late and who were forced to abandon their homes (see prior entry Ohio is Not Alone: Bankruptcies Continue to Rise Across the Nation). If you are facing foreclosure or considering bankruptcy, be sure to contact an experienced attorney to learn your options.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Foreclosure

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The Vice President of a Cleveland, Ohio based regional bank recently told a friend of mine that his bank had called thousands of Ohio homeowners who were behind on their payments to discuss their options. Out of these thousands of phone calls, only a handful of people even answered the phone! The reasons are obvious …fear, uncertainty, pride, and denial. Nobody wants to tell someone they can’t pay.

The reason I am sharing this story is to show you that, if you are falling behind on your mortgage, you are not alone. Remember, they were calling thousands of people just like you that, for whatever reason (and there are many), could not pay their mortgage. You may have been a victim of a predatory loan or a layoff. It doesn’t matter the reason, what is important now is that you don’t stick your head in the sand and ignore the problem because it won't just go away. You should talk to the bank or contact an attorney to speak on your behalf. The worst thing you can do is to ignore the problem and let your opportunity to fix the situation slip away.

Once you have fallen behind on your mortgage (usually by three months or more) your lender will consider you in default, accelerate your debt and commence foreclosure proceedings. Ordinarily, once the bank has determined they will foreclose they will stop accepting payments and will not reinstate your loan unless you come up with the entire past due amount plus any legal fees and costs they have incurred.

Even after a foreclosure is filed you have options. Many counties, such as Cuyahoga, have voluntary mediation programs in which you can elect to participate when facing foreclosure (you should receive a notice of the program with your foreclosure papers from the clerk of courts). A qualified attorney may also be able to help you negotiate a loan work out to reduce your interest or payments, but this is more easily done before you incur legal fees and expenses of foreclosure. Depending on your overall financial situation you may want to contact an attorney to explore a Chapter 13 bankruptcy which allows you to keep your house and catch-up on your past due payments while also lowering and eliminating your other debt through a structured repayment plan. If you are facing foreclosure, contact an attorney now to learn more about your options.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Foreclosure

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There is no denying that Ohio is facing a serious housing crisis and foreclosure filings in Northeast Ohio are at record levels. Unfortunately, many homeowners facing foreclosure simply abandon their home or surrender it to the lender. If you are one of the many facing foreclosure, then you should consult an experienced attorney to review your case and discuss your options before you give up your home.

If you are not yet in foreclosure but are behind on your mortgage, then you should also consult an attorney while you still have the most options available. However, even after the foreclosure has been filed, an attorney may find a basis to challenge the foreclosure action or be able to negotiate a resolution on your behalf. If these options do not work, a bankruptcy can also stop the foreclosure and may allow you to keep your home.

One new defense for homeowners in foreclosure resulted from a ruling last October by Federal Judge Christopher Boyko in Cleveland. In October 2007, Judge Boyko ruled that a foreclosing lender had not filed the proper paperwork to support its right to foreclosure on fourteen Ohio homes (Judge Christopher A. Boyko, Opinion and Order, In re Foreclosure Cases, Case 1:07-cv-02282-CAB, U.S. District Court, Northern District of Ohio, Eastern Division, filed 10/31/2007 ). Previously, many courts let this slide and banks and lenders were often permitted to bypass the requirement to produce the original mortgage note by simply filing a "lost note affidavit" attesting that the original note could not be located and then proceed with foreclosure. Judge Boyko's ruling provides a basis for homeowners to challenge the lender's right to the security (your house) and potentially stay or stop the foreclosure proceedings if the lender cannot produce the original mortgage note.

Since Judge Boyko's ruling, several judges in other jurisdictions have followed suit and required lenders to produce the original mortgage note in order to proceed with their case. Due to the common practice of lumping mortgages together and selling them as mortgage-backed securities, many lenders are not the originator of the mortgage and are, therefore, unable to produce the original note, providing a basis to challenge the foreclosure. Notably, it has been reported that Ohio Attorney General Marc Dann is challenging the ownership of mortgage notes in as many as forty cases in Ohio.

If you are facing foreclosure you are certainly not alone. Foreclosures in Ohio rose eighty-eight percent in 2007. Recent developments in Ohio law as well as the increased willingness of lenders to resolve or "work-out" mortgage delinquencies make it more important than ever for homeowners to explore all of their options when facing the loss of their home.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Foreclosure

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