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CLIENT ADVISORY - December 7, 2007

Some Help for Ohio Borrowers

by Larry R. Rothenberg, Esq.

Last month, a bill was introduced into the Ohio Legislature, which would make funds available for counties to help prevent residential mortgage foreclosures and to facilitate repair or demolition of deteriorated residential buildings in foreclosure.  The bill would provide funds by extending a program currently in effect in Cuyahoga County, to all 88 Ohio counties.

Under current law, 5% of all delinquent real property, personal property and manufactured and mobile home taxes and assessments collected by the County Treasurer are deposited into a delinquent tax and assessment collection fund in each county.  Those funds may be used by the Treasurer and the County Prosecuting Attorney for the collection of delinquent taxes and assessments.  Temporary authority was granted to the Treasurer of Cuyahoga County to use the surplus delinquent tax collections to help residential borrowers renegotiate or cure their defaults, through no-interest loans payable at the end of the term of their mortgages.  As a result, at least 50 families in Cuyahoga County were able to avoid foreclosure.

The new bill would expand this authority throughout Ohio, and would authorize up to three million dollars in the county's delinquent tax and assessment collection fund to provide mortgage rescue financial assistance in the form of loans to borrowers, who are in default of their home mortgages.  The funds would be available for the payment of late fees, to clear arrearage balances, and to augment monies used in the county's foreclosure prevention or mortgage rescue program.  The funds may also be used to assist cities in the abatement of nuisances caused by deteriorated residential buildings in foreclosure, including the costs for boarding up such buildings, lot maintenance and demolition.

Many municipalities are putting increasing pressure on lenders to cure building code violations.  Passage of the new bill would be welcome news to mortgage servicers, with regard to both the lenders' loss mitigation efforts and keeping many deteriorating residential properties maintained.

If you have any questions on this information, please contact Mr. Larry R. Rothenberg, Esq.

Larry Rothenberg is a Partner managing the Foreclosure/Evictions department of the Cleveland office of Weltman, Weinberg & Reis Co., L.P.A. He is the author of the Ohio Jurisdictional Section contained in the treatise, "Dunaway, The Law of Distressed Real Estate". The firm handles foreclosures and related litigation throughout Ohio, Kentucky, Indiana, Illinois, Pennsylvania and Michigan.  Larry can be reached at (216) 685-1135 or via e-mail at lrothenberg@weltman.com.

Client Advisory is published by Weltman, Weinberg & Reis Co., L.P.A., an organization providing comprehensive creditor representation.  The information contained in this newsletter is a summary of legal information and is not intended to constitute legal advice on specific matters or create an attorney-client relationship.  Contact any of our offices or visit our website at www.weltman.com for more information, company facts and attorney profiles. (c)2007