Dealing with a parent's unexpected death is never easy. Amid the shock and grief you're experiencing can also come worries about more logistical matters, from taking on responsibility for any pets left behind to liquidating your parent's estate.
These matters can become even more complicated if you find out that your parent was facing mortgage foreclosure proceedings at the time of his or her death. Attempting to deal with the bank and unravel the timeline of events—often when you may not even have the legal authority to negotiate a mortgage modification on your parent's behalf—can be a significant challenge.
Read on to learn more about Ohio's laws governing the mortgage foreclosure process and what you'll need to do if you'd like to attempt to avert foreclosure and maintain your parent's home as part of his or her estate.
OHIO'S FORECLOSURE LAWS
Like many states, Ohio follows a judicial foreclosure process, which means a lender must file a civil lawsuit and go through all associated court procedures before a foreclosure judgment may be granted.
This can be good news for heirs; states that don't abide by this type of judicial process can often "fast-track" their foreclosure proceedings, making it tougher to negotiate any type of workout.
Generally speaking, a formal foreclosure complaint will be filed only after the borrower has missed at least three monthly payments, putting him or her at least 90 days in arrears.
After the first or second missed payment, your parent's bank likely sent him or her a demand letter to indicate that the mortgage balance would accelerate, or become due in full, unless these skipped payments were quickly caught up.
Once a foreclosure lawsuit is officially filed, the borrower, or defendant, is served with a summons and complaint. If the borrower doesn't file a response to this complaint with the trial court within 28 calendar days, the lender may proceed to seek a default judgment of foreclosure.
On the other hand, if an answer is filed, the trial court will need to schedule the matter for hearing. This hearing will help the trial court determine whether foreclosure should be granted—and title to the property given to the lender—or whether some alternative, like reinstatement, short sale or a deed in lieu of foreclosure could be a more equitable option.
When a borrower files an answer to the complaint, he or she may request that the matter be sent to mediation rather than be litigated. Mediation is a less adversarial process than litigation and can often help the parties reach an agreement to avert foreclosure.
YOUR RIGHTS AS A POTENTIAL HEIR
Your rights largely depend upon where your parent was in the foreclosure process at the time of his or her death. If your parent only recently fell behind on mortgage payments and a foreclosure complaint has not yet been filed, it's possible you may be able to informally come to an agreement with the mortgage lender to prevent any further legal action.
On the other hand, if the matter has already wound its way through the court system to end in a judgment of foreclosure, or if the house has already been listed—or sold—at a sheriff's sale, your options—and timeline—may be more limited.
Fortunately, Ohio provides a redemption period that can permit borrowers to reinstate their mortgages, plus any applicable fees and cost, up until the trial court confirms the sale.
The sheriff then has a 60-day deadline to confirm to the trial court that a foreclosure sale took place, while the trial court has an additional 30 days to record and confirm this sale. This means that a foreclosure defendant has up to 90 days to come up with the necessary funds to reinstate this loan and continue to make timely payments.
If you've found yourself tangled in your recently-deceased parent's foreclosure mess, you'll want to contact an attorney as quickly as you can. An attorney can help you and any other potential heirs more fully understand your rights and obligations.