Recent Supreme Court Decisions That Could Impact Your Foreclosure Defense
Ohio residents facing foreclosure often feel like the system is stacked against them. But court decisions can significantly change the legal landscape, sometimes in favor of borrowers. Over the past few years, the Ohio Supreme Court has issued several rulings that shape how foreclosure cases are handled. This clarifies the rights of both lenders and homeowners. Understanding these changes can make all the difference when defending your home from foreclosure.
Standing and timing: the right to sue
Among the most important foreclosure issues in Ohio is the legal concept of standing. Standing refers to whether the lender has a legal right to file a lawsuit or not. In Federal Home Loan Mortgage Corp. v. Schwartzwald, the Ohio Supreme Court ruled that a bank must have standing at the time it files the foreclosure complaint, not later in the process. This decision continues to serve as an important foreclosure defense for homeowners.
In addition, more recent appellate court rulings have clarified how “standing: works when mortgages are transferred or scrutinized. If a lender cannot prove ownership of the promissory note and mortgage at the time the lawsuit is filed, the case could be dismissed. Foreclosure defense attorneys continue to use this reasoning to challenge foreclosures initiated by banks or servicers that rush to file before their paperwork is complete.
Redemption rights and fair valuation
Under Ohio law, homeowners are granted the right to redeem their property up until the confirmation of sale. In Bank of New York Mellon v. Rhiel, the Court emphasized that courts must carefully balance the borrower’s redemption rights with the lender’s right to finality. The decision reinforces that borrowers should have an opportunity to cure defaults or refinance before losing their homes for good.
Another key development from this case involves fair market valuation. When a sheriff’s sale yields a price that seems unreasonably low, courts have discretion to set aside the sale if it “shocks the conscience” of the court. Recently, rulings have encouraged trial judges to take a keen look at sale prices. This was particularly true when pandemic-era valuations or rapid filings distorted the market values.
Foreclosure and consumer protection
In years past, the Ohio Supreme Court has acknowledged the intersection of consumer protection statutes and foreclosure law. Borrowers successfully raised several defenses under the Ohio Consumer Sales Practices Act (CSPA) and the federal Truth in Lending Act (TILA) when loan services engage in either deceptive or unfair practices.
If the lender failed to properly credit payments, misapplied escrow funds, or misrepresented modification options, the Ohio courts are increasingly open to allowing counterclaims for damages. This provides leverage for borrowers and could lead to settlements or loan modifications that help families stay in their homes.
Talk to a Columbus, OH, Foreclosure Defense Lawyer Today
Kohl & Cook Law Firm, LLC, represents the interests of borrowers in foreclosure defense cases. Call our Columbus foreclosure defense lawyers today to schedule an appointment, and we can begin discussing your next steps right away.
Source:
supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdf
