Legally Weird - The FindLaw Legal Curiosities Blog

Fast Track Foreclosures: New Ohio Law Means $1 Homes for Sale

Ohio had good reasons to increase the efficiency of home foreclosures in the state: reducing the time it takes to complete a foreclosure can also cut down on the problems long-vacant properties can create, such as blight, squatters, and vandalism, along with the lowering of neighboring property values. So the state passed House Bill 390, which not only shortened foreclosure timelines, but also removed the requirement that bidding on foreclosed homes at auction begin at two-thirds of the appraised value of the home.

Another piece of the law meant to expedite resale of a vacant home, this meant that a 92-year-old bungalow in Akron recently sold for just $1.

A Steal or Stolen?

The new law was meant to address the glut of vacant homes in the Buckeye State, which was hit hard by "a double whammy of risky mortgages and a whopper of a financial crisis," according to the Akron Beacon Journal. Before now, potential buyers may have avoided the abandoned home, which probably would have then been donated to a public land bank or just remained empty, with the bank finding it untenable to pursue the debt or own an abandoned home, which can cost more to maintain or fix up than it's worth.

But under the new law, the time vacant or abandoned properties are tied up in foreclosure suits has been reduced from two or three years to as little as six months, and their sale price has plummeted. At the time the previous owner of the bungalow in question took over her deceased mother's mortgage, she owed just $7,252.45 on a $30,000 loan. Unable to pay the bills, she lost the home to the mortgage holder, Citizens Bank, who then scooped it up for $1 at a sheriff's auction.

A Feast of Foreclosures

This could be good news for frugal homebuyers in Ohio, but not all neighbors are happy about homes going on the market for so little. "Holy sh*t," Adeline Miller, who rents next door to the bungalow, replied to the Beacon Journal. "I've got $2." Perhaps she should check out the next Summit County Sheriff's Office public auction -- it's every Friday at 10 a.m. at the county courthouse.

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