Ohio's Trying to Slow Foreclosures

The state attorney general's office is looking for new ways to slow foreclosures in court, hoping a recent Ohio appellate court decision will help in those efforts.

Ohio Attorney General Marc Dann was largely unsuccessful in his attempt in December to dismiss 40 foreclosure cases around the state. Seven of the cases are still pending, but the others were dismissed for various reasons, Tom Winters, first assistant attorney general, said Thursday.

"That ruling was the first time that a court in Ohio has held that a mortgage company must prove that it still holds the mortgage to the home before it can proceed with a foreclosure," Winters said. "That's consistent with what the federal courts have done, and that's encouraging."

Winters said the attorney general's office filed the 40 motions to dismiss foreclosure cases around the state because they found Ohio was named as a defendant in those filings.

Foreclosing lenders routinely name the state and often a city and county as defendants along with the home buyer when filing foreclosures because they presume there may also be tax problems with the property, he said.

"We kind of took a shotgun approach around the state with the motions to dismiss, and it was a mixed bag," Winters said.

He said many of the motions were dismissed because it was found the state didn't have an interest in the property. Some of the foreclosing lenders withdrew in others, and the state was denied in some cases.

But the state didn't get to the stage where it could argue that foreclosing lenders couldn't show they owned the mortgages at the time they tried to take the homes.

"What we are trying to say is get your cases right before you file them," Winters said.

The attorney general's office also is involved in an initiative to allow low- to moderate-income homeowners in foreclosure to get a free lawyer to fight the case in court or work out a settlement with the bank.

"If we can slow the filings down and educate the homeowners on how they can negotiate to stay in their homes, then you have a better chance of resolving this stuff," Winters said. "It's not going to work for everybody, but right now nothing's been working for anybody, and that's the problem."