House Bill 220 (H.B. 220), which would require more costly publication of notices in foreclosure cases, passed the Ohio House on June 2, 2010, and is now pending in the State and Local Government & Veteran’s Affairs Committee of the Ohio Senate. 

Current statutory and due process requirements call for service of the summons by publication in appropriate cases, and notices of sheriff’s sales, to be published in a “newspaper of general circulation.”  For decades, the practice has been that notices are published in commercial legal newspapers, which are qualified by being designated as “official” by the courts in their respective counties.  H.B. 220 would modify the requirements for a newspaper to qualify as a “newspaper of general circulation,” and will exclude many or all of the legal newspapers in the larger counties. 

As a result, if the Bill is passed by the Ohio Senate, plaintiffs in foreclosure cases will be required to have their notices published in the major daily newspapers which is expected to cost more than double the current amounts.

Sponsors of the Bill contend that directing the publications to newspapers with a broader circulation would result in a better informed public.  However, especially with regard to sheriff’s sales, almost every county sheriff posts the county’s sheriff sales on their websites.  It would seem that almost anyone interested in learning of properties scheduled for sheriff’s sale would look first to the sheriff’s website. 

The original Bill was actually based on the recommendation of the “Local Government Public Notice Task Force,” which was created by the legislature in 2006 as part of a national effort to study whether legal notices can be brought into the internet era.  In fact, the Bill will allow political subdivisions to publish certain of their own notices on their own websites, in lieu of multiple publications in the newspapers.

Operators of the legal newspapers, who may be put out of business by this move, understandably oppose the Bill and complain that a substitute version of the Bill was “slipped in” to cut out the use of the legal newspapers.  The Ohio Bankers League also expressed opposition to the Bill due to the increased cost. 

We believe that the Bill is ill-advised, because we doubt that it will result in any real benefit to the public.  Instead, not only will it pile additional costs onto the lenders, it will add to the burden on borrowers who are seeking to save their properties from foreclosure, through reinstatement or payoff.  The significantly increased cost could cause some borrowers, who are short of having the wherewithal to fully reinstate or propose an acceptable payment plan, to lose their properties and also be faced with higher deficiency judgments if the Senate enacts the Bill.

We will keep you advised of further developments with regard to this bill.  For a complete copy of the bill, go here.

If you should have any questions, please contact Larry Rothenberg at 216-685-1135 or lrothenberg@weltman.com. Larry is the partner-in-charge of the Cleveland real estate and foreclosure department of Weltman, Weinberg & Reis Co., L.P.A. He is the author of the Ohio Jurisdictional Section contained within the treatise, "The Law of Distressed Real Estate", published by The West Group. The firm handles foreclosures and related litigation throughout Ohio, Kentucky, Indiana, Illinois, Pennsylvania and Michigan.