Ohio Practical Business Law : Columbus Ohio Business Lawyer & Attorney : Teri Rasmussen : Plunkett Cooney Law Firm : Commercial Law, Creditors, Business Formation : Columbus, Central Ohio

One of the questions I get asked a lot by my bank and creditor clients is "how long?"  How long til we can get the property back?  And those on the unfortunate receiving end of a foreclosure have the same sort of question - how long til I have to move out? - for different reasons.  Of course the answer is that it depends on so many different things and varies considerably from one county to the nextand one case to the next.  But that's not really the sort of answer anyone can run a bank on or make personal decisions with.  So here are some slightly more specific FAQ  

     1.     How long can I stay in my home if it is in foreclosure? 

If your residence is in foreclosure, it still belongs to you until the time it is sold at sheriff's sale and a confirmation entry is entered by the Court.  So, in plain language, the house is still yours until it is sold at sheriff's sale.  At that time, title to the property passes to the successful purcahser at the Sherriff's sale.  However, it will typically be at least a few more weeks (maybe even two or three months) as a practical matter before the confirmation entry is entered by the Court and the successful purchaser at the sheriff's sale receives the deed.  Because foreclosures are taking so long, in "real life", we are probably talking a year or more.

Double-edged sword is that you ARE still the owner as far as taking care of property......  Soooo,,. if you were thinking about just walking away from the whole mess because you're so far underwater equity-wise, it may not be quite that simple.  For a brief summary of the consequenses ogf this approach, visit Connie Carr's post entitled Mortgage Debt: The Consequences of Walking Away over at the Ohio Real Estate Blog.

     2.      How long will the foreclosure take? 

Talk about impossible questions to answer!  I like to start with the absolute MINIMUMS as far as time periods required if everything went exactly perfectly and there were absolutely positively no delays whatsoever.   Here's what has to happen to at least get to the point of getting a Decree in Foreclosure.  

• Defendants must actually be "served" with the foreclosure Complaint, i.e. they must either actually receive a copy of the Complaint or be deemed served through "publication by service" which means that it's been advertised in those tiny print LEGAL NOTICES part of a local newspaper.  Figure probably a week or two if no problems arise.
• Once "served", under Ohio law, a defendant has twenty-eight (28) days to respond to the Complaint.  So, OK, figure another month here.
• If the defendant does not respond after being served, the plaintiff lender can seek a "default" judgment.  To do this, the plaintiff lender must file a Motion for Default with the Court and wait for the Court to enter the Default Judgment.  This is obviously a HUGE wild card.  Some judges may enter judgment right away while others may just let things sit on their desk for months.  And there's really not all that much the plaintiff lender can do to move things along.  Let's just pencil in a couple of months here as being a not unreasonable period of time for this to happen, but with the understanding that this might well be much longer.
• If, on the other hand, a defendant does respond by filing an Answer to the foreclosure Complaint or there are other complications, the plaintiff lender will need to file a Motion for Summary Judgment.  A Motion for Summary Judgment is similar to a Motion for Default Judgment, but will need to address any arguments brought up by any defendants.  In addition, an Affidavit by an officer of the plaintiff lender will probably also be included setting forth the amount owed and explaining other relevant facts.  Once the Motion for Summary Judgment is filed, defendants have fourteen (14) days to respond and customarily, the plaintiff lender will have an additional seven (7) days to file a responsive Reply.  Here again, it's up to the judge as to when a decree in foreclosure will be entered and there really isn't that much a lender can do to hurry things up.  So, OK, figure 2-6 months here (although I will tell you that I currently have at least one case in which the Motion for Summary Judgment has been pending for more than a year)    

So, to recap, to get from the point the foreclosure Complaint is filed to actually having a judgment Decree in Foreclosure, it's going to be AT LEAST 3 1/2 months or so, and THAT IS SUPER OPTIMISTIC!!!  More likely, you are really looking at six to seven months or more and even that assumes that everything goes perfectly.  My anecdotal expereince is whether commercial or residential, a year or more is NOT an unusual amount of time for a foreclosure to take right now just to get to judgment, even if there is no spirited defense.

     3.     So the case FINALLY has reached that Judgment Decree in Foreclosure stage!  NOW how long til it finally gets auctioned at Sheriff's sale? 

Short answer: one heckuva lot longer than you might expect.  Again, I like to go with what i know to be the MINIMUM periods of time required and work out from there.  Here's what has to happen at this point:

• First off, under Ohio law, the property MUST be appraised by appraisers working for sheriff's office.  This is because, under Ohio law, the opening bid  at sheriff's sale for the proerty MUST be at least TWO-THIRDS of this appraised value.  How long this takes will depend A LOT on what county the case is in.  However, in general, let's figure about a month here.        
• Once the appraisal is done, the Sheriff's Office must set the date on which the property will be offered for sale.  This is where, as a practical matter, things really SLOOOW down.  As a practical matter, this is taking MONTHS right now.  By way of example, Franklin County currently already has sheriff's sales already scheduled through March.  In other words, right now, this step is taking 3 months or more.
• Once the sale date is set, it must be advertised for at least three consecutive weeks.  If there is a silver lining anywhere, it's here where the advertising can take place during the waiting period between the time the sale is set and when it actually occurs.  Also, unlike some surrounding states such as indiana, typically most Ohio counties have sales on a weekly basis.    
• If the sale is cancelled for any reason,even if it was something like a blizzard, the property must be readvertised.  There is no such thing as "postponing" a shriff's sale without the necessity of having to readvertise the property.  However, a new appraisal is not required.

So, to recap here, we're probably talking 3-4 months AT BEST!!!!

    4.     The Sheriff's sale has happened!!!! When do I get $$$?  When do I get the property??? 

OK, here the "good news" is that in Ohio - unlike certain other states -- the "equity of redemption" ends when the hammer falls at sheriff's sale and the Confirmation Entry gets entered by the Court.   The exact process will probably vary from one county to the next.  (On its website, the Franklin County, Ohio Sheriff's Office has helpfully posted an overall summary of its procedures following sale as well as an even  more specific  "What You need to Know as a Potential Third-Party Purchaser"  For other counties, visit the Buckeye State Sheriffs' Association website.)  In general, here's the process: 

• Once the sheriff's sale is over, the confirmation entry is to be submitted within 30 days after the sale,
• Once the Order of Confirmation has been entered, the plaintiff's attorney is to submit the deed to the Sheriff's Office within seven (7) days thereafter
• The successful bidder generally has thirty (30) days following entry of the Order of Confirmation to pay the purchase price to the Sheriff's office, although the precise amount of time will be set forth in the Order of Sale.
• The Sheriff is supposed to record the deed within fourteen (14) days of payment, but that doesn't always happen.  Once the deed is recorded, it will be sent to the successful bidder. 
• The proceeds will be distributed as described in the order of Confirmation after the purchase price has been paid in.

So you're looking at another two or three months here.

     5.     Can I get control of the property sooner by getting a receiver appointed and how long will that take?

Yes, maybe. Appointment of receiver generally only makes sense in the context of commercial properties.  Most  commercial mortgages provide for the appointment of a receiver and especially if there are defaults other than  nonpayment, appointment of a receiver should not be especially difficult.  It is possible in certain cases to obtain appointment  of a receiver on an expedited basis, but the timing and the identity of the individual appointed is still a matter of discretion with the court.  Once the receiver is appointed, the receiver can collect the rents,  handle maintenance issues, and interface with tenants.  However, in non-emergency situations, it is sometimes difficult to obtain a quick hearing date on the Motion to appoint a receiver.  

    6.     What about a "deed in lieu"?  Can that speed things up?

Yes, it can.  However, a "deed in lieu" in which the borrower conveys the property over to the lender, usually in exchange for a release or limitation of liability, only really works if (A) the borrower wants to to do this; and (B) there are no other liens on the property.  If those two criteria are met, a deed in lieu (DIL in the biz) can happen very quickly, perhaps even in a month or less.    

     7.     So the bottom line is.....?

Any way you look at it, foreclosure in Ohio is a long process for either residential or commercial property.  Think at least a year before the property is auctioned at Sheriff's sale and another couple of months before it's finalluy done.  In a commercial foreclosure, getting a receiver appointed early in the case can make the long wait far more palatable to the foreclosing lender as it gives the lender control over the income being produced by the property.

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Suppose a foreclosing lender had to come up with the CASH for EVERY deposit required in foreclosure sales in which it was the foreclosing plaintiff and successful bidder at sheriff's sale.  It shouldn’t take long to realize that we are talking about a MESS OF DOLLARS here.  Could that cause a cash flow issue and maybe slow down the pace of foreclosures?  Well maybe. 

About a year ago, Ohio made several significant changes to its foreclosure law.  Then and probably even more now, foreclosures (particularly of the residential variety) were widely being perceived as increasingly serious epidemic.  And so various foreclosure mediation programs were born, backlogs legitimately produced delays, and courts in some areas of the state started instituting procedures such as referring every single foreclosure case to a magistrate which promised to slow the entire process down considerably. 

Now from a lender standpoint, none of this was good news.  But apparently, in the view of some, this wasn’t enough.  And so, in some courts now – primarily in northeast Ohio which has been hit hardest, additional measures have been taken to make foreclosure a more difficult process for lenders. 

I mentioned the other day that I’d made a trip down to a Franklin County, Ohio sheriff’s sale in a pending foreclosure case I am handling for a client.  And part of the reason I went myself was that it involved bidding for a junior lienholder in a situation in which we were anticipating contested bidding. Which squarely raised the question: could I credit bid on behalf of this junior lienholder or was my client going to have to come up with the full amount of the deposit typically paid by third party purchasers?

Now, you think you know things… and then you find out that well, maybe, you don’t or at least the whole world isn’t the way you thought – and if you’re anything like me, that starts to concern you at least a wee little bit ‘cuz now you start to worry ‘bout what you CAN rely upon.  And what I learned this week was that while fortunately here in Franklin County, the world of foreclosures and sheriff’s sales was indeed precisely as I thought, it’s a “whole ‘nother ball game”  elsewhere in Ohio.  

Specifically what I found out was that the concept of “credit bidding” whereby a lienholder did not have to come out of pocket so long as the amount of its bid was no more than the amount owed it was not quite so universal a truth as I had heretofore believed.  Here in Franklin County and Central Ohio, sanity – from the lender perspective – reigns.  First lienholders needing or wishing to bid in a property brought to sheriff’s sale in a foreclosure proceeding need only bring a much smaller specified amount to successfully “bid in” property.  In addition, junior lienholder (such as my client) are also not required to pay more than this.

In Cuyahoga County (i.e. Cleveland), it’s a whole different story.  There, NO ONE is allowed to credit bid AT ALL.  Local Rule 27 governing foreclosure sales requires a 10% deposit (based on the appraised value of the property being offered) to be made by the successful bidder at sheriff’s sale.  It also states: 

When the purchaser is the lien holder after the lien of costs, taxes and assessments, the Court  may order, if the lien holder or assignee is the successful bidder at sale, that the required deposit be waived and thar all costs, taxes and assessmenof ts be paid upon receipt of a statement from the Sheriff of Cuyahoga County

However, the Foreclosure Terms of Sales available on the Cuyahoga County Sheriff’s website make it absolutely clear that NO WAIVERS willl be granted, stating "There shall be no waiver of Deposit for any Sheriff Sale.".

A similar procedure has also been adopted in Erie County.   In Lucas County (i.e. Toledo), however, lienholders are only reqired to come up with $1000 plus the amount of real estate taxes due.  And in Montgomery County, Local Rule 2.23 permits credit bidding for first lienholders, but not for jumior lienholders,  So I suppose the practice point here is to be sure to check the local rules before showing up at a sheriff's sale. 

Why is this happening?    it arises from the interpretation of revised Ohio Rev. Code 2327.02 which provides in reelvant part:

 If the property is sold under an order of sale or transferred under an order to transfer, the officer who conducted the sale or made the transfer of the property shall collect the recording fee and any associated costs to cover the recording from the purchaser or transferee at the time of the sale or transfer and, following confirmation of the sale or transfer and the payment of the balance due on the purchase price of the property, shall execute and record the deed conveying title to the property to the purchaser or transferee. For purposes of recording that deed, by placement of a bid or making a statement of interest by any party ultimately awarded the property, the purchaser or transferee thereby appoints the officer who makes the sale or is charged with executing and delivering the deed as agent for that purchaser or transferee for the sole purpose of accepting delivery of the deed

Not certain the statute actually forbids credit bidding?  Well, neither am I. Now, rationally and logically, here is what I can see.  If counties want a deposit to be made to cover real estate taxes, well O.K. maybe I can see that.  However, beyond that, when it comes to the first lienholder, it doesn't even make sense to require additional payments into the Court,  It doesn’t make sense because the lienholder is PAYING ITSELF at this point!! 

For junior lienholders, I suppose I can see some logic here, but as a practical matter , it still makes very little sense.  Junior lienholders in one case are likely to be seniore lienholders in another case so it is unlikely that there will be any actual problem with payment of these amounts at the time the deed is ready.  And not infrequently, given the delays experienced in completing the foreclosure process, the successful lender bidder will have already assigned its bid and sold the property to a third party in any event , thus complicating the financial accoounting for these transactions.       

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This morning I went down to the weekly Franklin County Sheriff's Sale to bid on a property for a client.  I don't get down there for this sort of thing that much anymore - paralegals and clients themselves tend to take the duty - but it was interesting to see both what was the same and what had changed from when I was the designated attendee years ago.

In the "old days", i.e. more than 20 years ago, sheriff's sales in foreclosures really did happen on the courthouse steps in some places.  Here in Franklin County, Ohio, sheriff's sales in foreclosures were done in the lobby of the Common Pleas Courthouse by a burly looking guy standing behind an enormous wooden podium (which is actually still there) and wielding a gavel.  It was noisy and necessarily a tad uncomfortable because it was strictly a standing only event with no seats.  And there really was a bit of a sense of drama as folks milled around waiting for the sale to begin.  And the actual fall of the gavel was a nice touch too.

Today, Franklin County sheriff's sales in foreclosure cases take place in a large nice quiet carpeted auditorium/room on the first floor of the courthouse with plenty of seats for everyone.  Three women - substantially less intimidating than I remember the guy doing it years ago - run the sales from a podium on a stage raised about 6 feet at the front of the room.  Then there are about a dozen table desks, well spaced in 3 rows, for the "regulars" who attend the event every week and may be bidding on multiple properties.  And for the rest of us, a couple of rows of reasonably comfortable chairs set up behind the special desks.  It is obviously a far more sensible arrangement, but at least to me, it somehow just doesn't quite seem as "official"  -- although of course it is.

Promptly at 9 AM every Friday (the time and day for sheriff's sales vary from county to county), the foreclosure sales begin.  First, all of the properties being withdrawn from sale, mostly because of bankruptcy filings but also possibly because they have been brought current or for some other reason, are read in alphabetical order by debtor.  Then each property is called in turn, again alphabetically by the principal defendant owner.  (Other counties may use a different order.)  Since my case involved a debtor defendant whose name started with "W", I was there for quite a while... and began to really appreciate the progress represented by the provision of those chairs.

So what happens, exactly?  Each sale is announced in the same way:

• Big Bank v. Jones at 123 Columbus Street,
• [Case  No.] 08-XXXX,
• Attorney Rasmussen,
• Appraised $XXX,XXX,
• Deposit $XX,XXX [in Franklin County and many other  Ohio counties, this is at least 10% of the appraised value, although the plaintiff lender can require more], 
• Parcel No. XXX-XXX-XXXX

And then, a brief description mentioning the subdivision or other identifying information is mentioned, followed by the words: 

Commonly known as 123 Columbus Street.  I need an Opening Bid of $XXX,XXX [here in Ohio this would be two-thirds of the Appraised Amount]    

At this juncture, bidding is open to everyone in attendance.    Sheriff's sales are open to the public.  It is not necessary to be an attorney, or even a paralegal, to bid.  Nor do you even have to be a resident of Ohio.  You do not have to register in advance, or even on the day of the sale,  to attend or bid.  You do, however, have to be there in person.  Eventually, sheriff's sales may carch up with technology, but for now there's no bidding by telephone or on-line and no streaming video of the sales as they happen. 

For most properties, there's not much interest.  Sometimes even the foreclosing plaintiff lender doesn't bid.  In these cases, the words "No Bid, No Sale "are intoned and the property will be reappraised at a lower value and offered for sale some subsequent Friday.   If, as often happens, the plaintiff lender makes the opening bid at the required minimum amount (and ocasionally for a bit more) and everyone else sits on their hands, the representative of the Sheriff's office simply says "Sold to the Plaintiff for $XX".

In the relatively rare situation in which there actually is some interest in the property being offered at foreclosure sale, bidding begins at the minimum bid amount, frequently kicked of by the plaintiff lender, and it goes from there.  There is no "auctioneer" in the sense of someone rattling on trying to coax higher bids as you might see in an ordinary auction.  Rather interested bidders simply speak up and the Sheriff's representative repeats the amount and pauses to see if anyone else wishes to place a higher bid.    If bidding gets bogged down, certain minimum increments may be imposed, but for the most part, bidding increases in the amounts desired by those bidding.  When it appears that no one wishes to place a higher bid, the iconic words "Going once, going twice, sold to... " are spoken, bringing the sale to an end.

At this point , the successful bidder must bring his properly completed Real Estate Judicial Sale Purchaser information Form and a Cashier's Check (no personal or company checks permitted except for lienholders) in the amount of the required deposit to the front of the room and hand it to the Sheriff's representative.  THIS MUST HAPPEN IMMEDIATELY - there is no waiting for the successful bidder to "go out to their car"  or over to the nearest bank branch to get the check - IMMEDIATE means NOW and if the deposit check isn't forthcoming or the paperwork is otherwise not in order for some reason, the property will be immediately resold right then and there!  (That actually happened once today although I don't know exactly what was wrong.) 

And then it's over.  No gavel now...  they just move on to the next property.  It's then up to the plaintiff lender's attorney to prepare a Confirmation Order within 3O days naming the successful bidder and specifying how the proceeds of sale are to be distributed in accordance with the applicable priority of the various lienholders.  The sheriff's deed conveying the real estate to the successful bidder and new owner must be prepared within 7 days after entry of the Confirmation Order and submitted to the Sheriff's office.  Sometimes it can then take quite a while after that before the deed actually gets recorded.  Once the Confirmation Order is entered by the Common Pleas Court, there is NO EQUITY OF REDEMPTION allowing the defendant to regain possession of the real property and the sale is final.

For more information about how Sheriff's sales are conducted here in Franklin County, Ohio, visit  the Franklin County Sheriff's website and click the "Civil Real Estate Sales" button on the left hand side of the page.   You can also find lists of properties to be sold at upcoming foreclosure sales, as well as the results of recently completed sales here - the results from today's sale were up by lunchtime.  Because Ohio's foreclosure law has recently changed, it may also be worthwhile to review the informational WHAT YOU NEED TO KNOW AS A POTENTIAL THIRD PARTY PURCHASER material made available there.

All in all, a fairly interesting Friday morning.

For another person's account of the experience, visit A Trip to the Franklin County Sheriff's Weekly Real Estate Auction.

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In my last post, I made some overall observations about Ohio's required judicial foreclosure procedures and explained the initial steps necessary to begin the foreclosure process.  In this post, I will explain what is involved, once the Complaint has been properly filed, in getting the property being foreclosed upon to sheriff's sale

One other caveat about this explanation is that it relates to foreclosures filed in STATE court as opposed to FEDERAL court.  While foreclosures are generally filed in state court, especially when receivership is involved, if diversity jursidiction can be met, foreclosures are now being filed somewhat more often in federal court.  in Ohio, this seems to happen most often in Cuyahoga County where the federal court route is perceived as a faster track option.

STEP THREE - Receivership Detour.  (Less than one day to several weeks after Complaint is filed.)  When commercial investment property is involved such as an office building, apartment complex, or multi-family property, the real property is generating revenues in the form of rental payments from tenants.  Lenders wanting to protect that stream of income and apply it to the defaulted loan will often seek appointment of a receiver to manage the property.  In addition, property securing defaulted loans has often been the subject of deferred maintenance and lenders are frequently concerned about deteriorating value of the property as a result.

Virtually all commercial loan mortgages securing a loan of any size have explicit provisions in them pursuant to which the mortgagor consents in advance to the appointment of a receiver in advance.  The following is a very typical such provision:

If an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of receiver for the Mortgaged Property to take any or all the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law.

Thus, commercial borrowers have by contract usually agreed to the appointment of a receiver in the event of a default. 

If for some reason, the mortgage lacks the requisite language consenting to appointment of a receiver,  Ohio Rev. Code 2735.01 permits appointment of a receiver when:

 A receiver may be appointed by ... the court of common pleas or a judge thereof in his county … in the following cases:            …

(B) In an action by a mortgagee, for the foreclosure of his mortgage and sale of the mortgaged property, when it appears that the mortgaged property is in danger of being lost, removed, or materially injured, or that the condition of the mortgage has not been performed, and the property is probably insufficient to discharge the mortgage debt;

…

(F) In all other cases in which receivers have been appointed by the usages of equity.

Appointment of a receiver is also permissible under common law whenever it will prevent a wasting of assets. 

To expedite appointment of a receiver, a motion seeking appointment of a receiver is usually filed at the same time as the Complaint.  Technically, the identity of a receiver and the terms of his/her appointment are up to the Court, but generally (although this varies considerably from county to county and from judge to judge) the Court will follow the suggestion of the foreclosing creditor.  Once appointed, the party appointed as receiver will have to post a bond in an amount set by the Court.

While appointment of a receiver often makes sense with respect to income producing property, lenders must weigh those benefits against the additional costs associated with receivership such as the premium for a receiver's bond, fees and expenses of the receiver, and additional attorneys' fees.  

STEP FOUR - Obtaining Decree in Foreclosure.  (No less than 6 weeks, generally 16-24 weeks, sometimes much longer.)  Once the Complaint, and any applicable motion for a receiver, is filed, service of process must be obtained upon the defendants just as in any other lawsuit.  Generally, service is first sought by way of certified mail, then by regular ordinary first class U.S. mail, and then, if necessary, by appointment of a special process server or by advertising.  Obtaining good service on all defendants may take as little as a week or several months; generally this process only takes about a week or two.

Twenty-eight (28) days after being served, a defendant must file an answer to the Complaint.  If no answer ot other responsive pleading is filed, a default judgment will be entered against the defendant.  If a senior lienholder fails to answer, their lien can be eliminated without. any payment to the lienholder so it is important not to ignore a foreclosure initiated by another creditor.  If the foreclosure has been commenced by another creditor, a creditor has the option of  either (A) "crossclaiming" by setting forth its own foreclosure claims which can continue even if the first creditor resolves its differences with the delinquent borrower; or (B) simply filing an answer setting forth its interest in the property being foreclosed.

If one or more defendants answer, then a motion for summary judgment must be filed before a decree in  foreclosure can be obtained.  If factual issues exist, a full-blown trial may even be necessary. 

Unless and until a receiver has been appointed, the delinquent mortgagor may remain in possession of the real property throught the pendency of the foreclosure proceeding.

STEP FIVE - Setting a Date for Sheriff's Sale.  (No less than 6 weeks and often much longer.)  After the Court has entered the Decree in Foreclosure, whether by default judgment, grant of a summary judgment motion, or following trial on the merits, a separate Order of Sale must be entered directing the Sheriff to sell the subject property at auction,  Once the Decree in Foreclosure has been obtained, the Order of Sale is a formality and serves as the operational document to put the mechanics of the foreclosure sale procedure in motion.

Pursuant to Ohio Rev. Code 2329.17 and Ohio Rev, Code 2329.18, the Sheriff must obtain an appraisal of the property from three (3) appraisers and file a copy of the appraisals with the Court.  The Sheriff handles the appraisal process on his own without intervention, consultation, or assistance from the foreclosing creditor.  The average of the appraisals establishes a floor below which the property cannot be sold; pursuant to Ohio Rev. Code 2329.20, the required MINIMUM BID is TWO-THIRDS of the APPRAISED VALUE based on the appraisal filed with the Court. 

Before the real property can be sold, Ohio Rev. Code 2329.26  requires that a notice of sale, showing time and place of sale, address of the property,and certain other required information,  must be published in a newspaper of general circulation within the county beginning at least thrity (30) days before the date of sale.  The notice must be published at least once a week, on the same day of the week, for at least three weeks.  All defendants (other than those who failed to respond to the Complaint) must be served with the notice of sale at least seven days before the sale. 

STEP SIX - Selling the Property at Sheriff's Sale.  Once the date of sale has been obtained and proper notice has been sent out, there is little for anyone to do but wait.   While Ohio Rev. Code 2339.272 permits the Sheriff to hold an "open house" at which prospective purchasers may view the property being foreclosed upon, in my experience, that rarely, if ever, happens.  Commercial investment property has typically remained open to the public thoroughout  the foreclosure proceedings so in these cases, perhaps the need for an "open house" is relatively small.  However, in residential foreclosures, the borrower may have moved out and the actual condition of the property may not be readily apparent.   In both cases, the doctrine of caveat emptor, i.e."buyer beware" has never been more applicable.  There are NO warranties about the condition of the property being sold at foreclosure sale, the successful purchaser is buying "AS IS, with all faults". 

And, no, the foreclosing lender will not make arrangements for prospective bidders to get inside to see the property so don't bother even asking!

On the appointed date of sale, the Sheriff holds an auction sale of the property, often quite literally on the steps of the County Courthouse, with bidding beginning at two-thirds of the appraised value as determined by the Sheriff. Thus, if the real property has been appraised at $150,000, it cannot be sold at sheriff's sale for less than $100,000.   If no one is willing to purchase at the required minimum bid, the property will be re-appraised and re-noticed for sale. 

The highest bidder becomes the succcessful purchaser of the property and is awarded ownership of the property free and clear of all liens belonging to defendants named in the forecosure action.   Typically, the successful bidder is required to make an immediate down payment to the Sheriff of at least ten percent of the winning bid with the balance due within a specified time thereafter, usually 15-30 days.  The foreclosing creditor is permitted to bid at the sale and if it is the successful high bidder, it need only pay the amount, if any, by which its successful "credit bid" exceeds the amount owed to te foreclosing creditor.  In addition the successful bidder is permitted to assign its bid to another party on whatever terms are agreeable between it and its assignee upon the filing of approriate pleading to the effect with the Court.

For the sake of comparison, it may be helpful to visit a post on the Calculated Risk blog entitled "Foreclosure Sales and REO for UberNerds" (which contains a further useful link to a website purporting to contain summaries of foreclosure procedures in all 50 states) to see how the Ohio foreclosure sale process differs in several significant ways from that in several other states.

STEP SEVEN - Completing the Foreclosure Sale Process.  (Approximately 4-6 weeks).  Following completion of the foreclosure sale and payment in full of the purchase price by the successful bidder (or bid assignee), a Confirmation Order approving the sale and ordering delivery of the deed to the successful bidder must then be entered by the Court of Common Pleas.

Once the Confirmation Order is entered by the Court, the delinquent mortgagor has no further right of redemption.   Ohio Rev. Code 2923.31 and Ohio Rev. Code 2329.33.  This differs from many other states.  Prior to entry of the Confirmation Order, the mortgagor can redeem the property and in  essence undo the foreclosure sale by paying the amount of the judgment, plus interest on the purchase price at the rate of 8% per annum from the date of deposit.

Again, every foreclosure is different and has its own timetable.  Local procedures vary considerably from county to county in Ohio and from judge to judge.  In addition, unique issues may arise which complicate the process.  However, in general, this is how a typical Ohio foreclosure unfolds when filed in state court.

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