Download Ohio Mortgage Bankers Association

OHIO MORTGAGE BANKERS ASSOCIATION
HB 463 Testimony of
Marianne Collins, Ohio Mortgage Bankers Association Executive Director and COO
Chairman Terhar, Vice Chairman Hambley, Ranking Member Kuhns, and members of
the committee, we thank you for the opportunity to give testimony here today. The Ohio
Mortgage Bankers Association is an industry trade group comprised of 110 members,
primarily community and national banks; credit unions; and non-depository mortgage
banking lenders. We have been is existence since 1969.
The financial crisis had a damaging impact on the residential housing market. While the
housing market is finally experiencing a recovery with sales, new construction, and
home values improving from the lows experienced in the recession; many communities
continue to carry scars from vacant and abandoned properties. The recovery requires
wise solutions for the nation’s inventory of vacant and abandoned properties which are
in a delinquent status. These vacant and abandoned properties cause numerous harms,
as they devalue neighboring properties when they fall into disrepair and escalate
maintenance and administrative costs for local officials, communities and mortgage
servicers. It is also very difficult for neighborhoods and communities that have suffered
significantly to recover, as the limbo status of these properties prevents new ownership
opportunities and offers difficult to control locations that attract criminal activity. It is
clear that vacant and abandoned properties are impeding a full economic recovery and
neighborhood revitalization efforts. To address this, state legislators across the country
are considering expedited foreclosure legislation for vacant and abandoned properties
as a promising solution.
The first step to expedite the foreclosure process is establishing, by reliable statutory
amendments, a clear and objective method to identify vacant and abandoned
properties. An unambiguous and easily understood definition greatly mitigates the risk
that properties used less frequently or seasonally might inadvertently be classified as
vacant and abandoned, and provides necessary protection from possible challenges for
those seeking to utilize an expedited foreclosure process. House Bill 463 establishes
that definition.
Through the creation of a statutory definition of vacant and abandoned property, the
party seeking to foreclose may begin building its case that a residential property fits this
definition. Equally as important, there must also be a method for courts in judicial
foreclosure jurisdictions to declare a property vacant and abandoned, and then allow for
an expedited foreclosure process to take place. This legislation balances a multitude of
interests, ensuring that due process protections are firmly in place for homeowners, and
that sensible procedures are available to the party seeking to utilize the expedited
foreclosure process.
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Judicial foreclosure systems often have lengthy timeframes between foreclosure
judgments and property sales which favor homeowners. But with a vacant and
abandoned property these considerations are less relevant. In fact, the passage of time
only creates more harm to the community and limits new homeownership opportunities.
HB 463 also makes positive changes to the judicial foreclosure process in general. The
servicer would be able to advertise both the initial and subsequent sale dates at the
same time. This reduces the lengthy period between sales, should the property not sell
at the first auction. Also, should the property not sell at the first auction, there would be
no minimum bid at the second auction, with a 14 day right of redemption.
HB 463 brings the foreclosure sale process into the 21st century by allowing for an
efficient online advertising and bidding process, which will increase exposure and
bidders for these properties.
The bill also allows for the use of private selling officers, in an effort to improve
efficiency. While we remain strong proponents of HB 463, we would ask that the
number of indications to verify the vacant and abandoned status of a property be in line
with HB 134, which passed the House 93-0.
In some counties in Ohio, it takes up to 10 months to receive the sheriff’s deed after the
completion of a sale. This causes problems for lenders and purchasers alike. HB 463
would establish a process in which transfer can take place, should the sheriff not
produce a deed in a reasonable amount of time.
In general, it is our belief that HB463 will be good for communities, in that it puts
properties back in the hands of homeowners in a timely manner.