Akron Bankruptcy Law Firm Blog

A settlement was announced between 49 states, including Ohio, and five major banks: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, related to illegal foreclosure practices. Under the terms of the settlement, the largest since the 1998 tobacco settlement, the five banks would pay a total of $26 billion to settle claims related to foreclosure abuse.

In exchange for the payout, the 49 states involved will agree not to pursue additional civil damages against the banks for claims related to robo-signing foreclosure documents. The settlement does not stop a homeowner from bringing a suit against his or her lender, pursing a loan modification or otherwise defending against a foreclosure action. Ohio homeowners who've already lost their homes to foreclosure will likely not get their homes back under the settlement.

Just one illness away -- that's how far many in Ohio and the United States are from taking on mounds of medical bills and debt, according to Mark Rukavina, Executive Director of The Access Project in Boston. As health care costs continue to rise, employers are passing those costs on to employees via higher deductibles. And, as unemployment remains high and more people are without health insurance, many others are left to pay out-of-pocket for medical care.

Sixty million adults across the U.S. are at risk of requiring medical treatment that they cannot afford, according to Rukavina. Healthcare expenses often go unpaid, or more recently, go on a credit card. Plastic is quickly becoming the way many pay for medical bills -- often on high interest rate cards that make the debt even more difficult to pay off.

Enough is enough. Whether you're staring at medical debt owed to health care providers or credit card debt that was the result of trying to keep afloat of medical expenses, your best option may be to consider bankruptcy. Medical debt (and credit card debt) is dischargeable in bankruptcy; an Akron debt relief attorney can explain the steps you can take to get a fresh start, free from medical or credit card debt.

One important reason to talk to an Ohio bankruptcy attorney if you are facing foreclosure is that even after you've lost your home, you may still be on the hook for the mortgage payment. No, not the full mortgage payment, but if the price that your home sells for at the sheriff's sale is less than the amount owed on your Akron-area home, your lender may be able to pursue a deficiency judgment against you.

A 'deficiency' in terms of your mortgage is the amount you owed on your home minus the amount the home was sold for at the foreclosure sale. If you owe $200,000 on your Ohio home and it sells for $150,000 at a sheriff's sale, your lender can pursue a deficiency judgment against you for the unpaid balance, in this example, $50,000. Ohio law allows lenders two years to pursue a deficiency judgment.

You may be thinking, "There must be a better way." In fact, there is. A Medina 'Stop Foreclosure' attorney can explain your options to you, including fighting the foreclosure up to the day of the sheriff's sale or pursuing bankruptcy to eliminate debts, including a deficiency judgment.

As part of a settlement reached with the State of Ohio, American Home Mortgage Servicing Inc. has agreed to act in good faith when processing requests for loan modifications from homeowners paying on one of the 17,000 mortgages the company services in Ohio. Former Attorney General Richard Cordray filed a 2009 lawsuit against the Texas-based company for alleged violations of Ohio consumer protection laws.

Current Attorney General Mike DeWine announced the settlement in mid-December. American Home Mortgage will be required, under the terms of the settlement to:

• Identify a single point of contact within AMHS for homeowners seeking a loan modification
• Suspend foreclosure and collection actions for homeowners seeking a loan modification
• Create an internal review process to go over all denied loan modifications

There are additional requirements under the settlement, including working with federal and state programs aimed at preventing foreclosure, intended to help Ohio homeowners who are seeking a loan modification from American Home Mortgage.