Perhaps you have hit some hard times recently, and have fallen behind on your mortgage payments. You might even have had to file a petition for bankruptcy. It has come to the point where your mortgage lender has given you notice that it is beginning foreclosure proceedings.
So it is time to move out of your home, right? Not so fast.
As city financial and personnel resources have to be diverted to maintain abandoned homes, an issue has arisen in Lima, Ohio. It may be the direct result of confusion about homeowner rights during the foreclosure process: people leaving their homes too quickly, and allowing their properties to deteriorate.
According to Lima city officials, often people facing foreclosure become confused about who really owns the home: the bank, or themselves. They apparently give the bank the benefit of the doubt, and leave. And when they leave, they stop caring for the property.
But the same city officials point out that until the foreclosure has reached the point where a court has ordered a homeowner out of the house, the homeowner remains just that: the owner of the home. This has potential benefits in two ways:
- First, homeowners should realize that just because a mortgage holder has begun foreclosure does not mean that it will finish it. It may withdraw the foreclosure, leaving the homeowner in possession.
- Second, even in a bankruptcy the mortgage lender may not seek to oust the homeowner, thus once again leaving that person in lawful possession of the house.
Being too quick to abandon a home can have negative consequences for the homeowner and the municipality where the house is. If the home and property become run down, the city may choose to demolish the house. If the vacant lot is later sold at a sheriff's sale, the homeowner's other assets may be put at risk of being seized to help satisfy any deficiency left over after the sale.
And as mentioned above, many times city governments would prefer to allocate their resources to matters other than cleaning up or tearing down vacant homes that the mortgage lender never actually took away from the homeowner.
Anyone who has received a foreclosure notice can avoid confusion about his or her rights in the home by consulting with an attorney. This may help to avoid an abandoned property situation and its potential negative outcomes.
Source: LimaOhio.com, "Property taxing code enforcement," Megan Kennedy, Sept. 1, 2014