Ohio’s Transfer on Death Statute became effective at the beginning of 2002. Prior to the law being passed, there was much buzz in the real estate and trusts and estates legal community about why Ohio did not have a vehicle permitting owners of real estate to transfer real property on death to a named beneficiary, thereby
Falling Property Values in Cuyahoga County
How low will they go?
Bending to market pressures, Cuyahoga County Auditor Frank Russo recently announced that the County’s 2009 valuation update will likely result in significant decreases in the County’s assessed value of residential homes – with an 8% average reduction across the County.
The media reports note that the State intends to compare Mr. Russo’s proposed values to the actual sales figures from each community and will ultimately approve new fair market values likely between 92% to 94% of the fair market value. The State’s suggestion of a 6% to 8% discount off of the appraised fair market value is really aimed at those properties that have not been recently sold. This “discount” should not be applicable to those non-residential properties where there was a recent arm’s length sale of the property.
School districts (when the sale exceeds the current assessed value) and property owners (when the sale is below the assessed value) actively seek adjustment of the market value of the non-residential properties to an amount equal to the purchase price. The Ohio Supreme Court has held that the purchase price paid in an arm’s length sale is the best indication of the fair market value of real property.
The Auditor’s decision to seek an 8% average reduction in value comes at the close of the property tax complaint filing season which ended March 31. In Cuyahoga County alone, a reported 17,000 decrease complaints were filed at the Cuyahoga County Board of Revision with respect to the 2008 tax year. Compared to the record 10,000 decrease filings last year with respect to the 2007 tax year, the 2008 “off-year” filings (the last year of the 2006-2008 triennium) are extremely notable.
Ohio Foreclosures – Legislative Update
Two foreclosure related bills of great interest to both borrowers and lenders were introduced in the Ohio House of Representatives in February but are moving slowly, if at all, through the legislative process. One of the bills is too bold to have a serious shot at getting signed by Governor Strickland, but the other is modest enough that it may pass.
House Bill 3, the more sweeping of the two, has languished in the Housing and Urban Revitalization Committee. At a very basic level, the bill would:
1. Impose a six-month foreclosure moratorium, during which a court could not hear or issue judgment on a foreclosure complaint. The moratorium loses a bit of its teeth, however, as a mortgagee an petition the court to proceed with the action if a borrower is more than thirty days late on a payment during the moratorium.
2. Establish new filing requirements for residential foreclosure complaints, including certain notices to be given to borrowers by loan servicers, a statement of mortgage information (including the identity of the note holder), an appraisal, and a $1,500 filing fee.
3. Allow common pleas judges to modify mortgage terms, including principal amount, in residential foreclosures if the judge determines the modification would benefit both parties.
4. Require mortgage loan servicers to register with the state and be subject to extensive regulation and oversight.
5. Establish a loan modification program, run by the Director of Commerce, which would allow borrowers to modify loans when a modification would result in a greater recovery to the lender than a foreclosure.
The drastic nature of HB 3, particularly the mortgage modification provisions, has led to strenuous opposition and even promises of constitutional challenges (and here) should it pass. While the bill as a whole likely won’t move much further, it wouldn’t be surprising to see small pieces of it come up for a vote. If any significant portion of HB 3 passes, lenders will be faced with sharply increased mortgage-related operating costs. They would need to quickly develop processes to determine which distressed properties are eligible for the moratorium bypass and whether the $1500 filing fee makes a workout preferable to foreclosure on a given property.
Combating Mortgage Fraud
Effective June 1, 2009 all residential properties (single family homes, condominium units and buildings with up to four units) in Cook County, Illinois will become subject to the amendments to the Illinois Notary Public Act contained in Illinois Public Act 095-0988 (the "Act") in an effort to combat mortgage fraud in Illinois residential real estate transactions.
The Ohio Supreme Court Clarifies the Effect of Low-Income Housing Tax Credit Restrictions on the Tax Value of Real Property
In Woda Ivy Glen Limited Partnership v. Fayette County Board of Revision (2009), 121 Ohio St.3d 175, the Supreme Court of Ohio considered whether restrictions on real property resulting from participation in the federal low-income housing tax credit program should be taken into account when appraising the property for real estate tax purposes. The
FDIC Deposit Limitations (Time for CDARS)
How can you safely deposit the funds of a condominium association, development entity, municipality or any entity which needs to know that there is little or no risk of loss to the deposited funds ? The Federal Deposit Insurance Corporation (FDIC) temporarily increased deposit insurance for individuals to $250,000. The increased deposit insurance is scheduled
U.S. EPA Proposes Mandatory Reporting of Greenhouse Gases
U.S. EPA took the first big step toward regulation of carbon dioxide and other greenhouse gases this week when it proposed a national system in which major sources would be required to report their greenhouse gas emissions. Knowing the amount of greenhouse gases emitted by the major sources will aid the federal government
Free Money in Cleveland !
"Every night before I rest my head; See those dollar bills go swirling ’round my bed."
So sang Patti Smith in the composition Free Money on her critically acclaimed 1975 debut album, Horses.
That’s a tune that cash-desperate real estate developers and project owners may have found themselves humming during the current credit crisis. But
Cuyahoga County’s New Land Bank – A Step Toward a “Sustainable Cleveland”
As I mentioned in an earlier post, Ohio Governor Ted Strickland recently signed legislation creating a new “land bank” in Cuyahoga County. Like a dose of cold medicine, Senate Bill 353 is not a cure for the foreclosure crisis, but it should help solve one of its primary symptoms – abandoned and vacant housing.
More than any other area in the state, Greater Cleveland has struggled with vacant properties due to its dramatic population decline over the past fifty years. In 1950, Cleveland’s population stood at 914,808, making it the seventh largest city in the U.S. Today, the population is estimated at 438,000. In other words, the city was built for twice as many people, leaving Clevelanders with easy commutes and plentiful abandoned properties.
Continue Reading Cuyahoga County’s New Land Bank – A Step Toward a “Sustainable Cleveland”
Tax Credit for Home Buyers: Will They Come Back to the Market ?
After much wrangling, the House and Senate came together in Conference Committee and each subsequently passed President Obama’s Stimulus Bill in record time. President Obama has now signed this historic legislation. The Stimulus Bill provides in part for a refundable tax credit for first time home buyers (who are defined as buyers who have not owned their