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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. 79 S. State Street, Suite D1 Westerville, OH 43081 614.682.6555 [email protected] 614.573.6620 Fax 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.