Ahead of expected foreclosure boom, new court program could help Ohioans keep homes
COLUMBUS, Ohio (WSYX/WTTE) — It's no secret the pandemic has shown a spotlight on how close millions of Ohioans are to missing rent or mortgage payments.
Data from earlier this fall shows, at one point, at least 500,000 people in Ohio missed their monthly payments to keep a roof over their heads; and experts say they expect another spike in foreclosures and evictions once federal mortgage moratoriums fully end.
Attorneys in Central Ohio are hoping a new court program, Mortgage Modification Mediation will help people leave courts with more affordable mortgages.
"There can be different reasons why somebody would file bankruptcy, such as a person who’s behind on their house payment," one of the circumstances under which bankruptcy attorney Ken Sheppard often meets his clients.
Sheppard and his colleagues say they expect a boom in foreclosures or the need for mortgages to be re-written and made more affordable early next year. However, he says the MMM could be a game-changer.
"It’s [bankruptcy] a tedious process, he explained. "You have to be meticulous and you have to make sure everything’s turned in and turned in timely."
That's where the program could help. The MMM essentially puts a third-party bankruptcy attorney, or "facilitator" in the middle of the bank and the homeowner. The facilitator would know what documents the bank is asking for, and can help guide the homeowner to make sure they present everything they need to the court. All of this would be done under court-imposed deadlines both parties have to meet. It helps keep both sides honest.
"The time deadlines that are imposed by this program are bringing the lender and the homeowner together, which you don’t normally see with court deadlines," Sheppard added.
Ohioans already going through the bankruptcy and mortgage negotiation process in the courts say they wished the MMM would have come sooner.
"There seems to be a lot of back and forth," Kelly Newman, currently in bankruptcy, said. "That’s going to benefit a lot of people., having that person, you know a mediator, going to bat for you to get everything done so you don’t have to keep getting dragged into the middle of it."
In Florida, where the idea of the mediation program was born, 66% of loan modifications are approved by the courts when done through the Mortgage Modification Mediation program. That's compared to just five percent when done outside the program.
For more information, visit the Southern District of Ohio's Bankruptcy Court website.
