Recent Title Insurance Issue May Cause Foreclosure Delays in Cuyahoga County, Ohio

Recent Title Insurance Issue May Cause Foreclosure Delays in Cuyahoga County, Ohio
by Lee Cuilli

The Ohio Title Insurance Ratings Bureau (“OTIRB”) recently announced Preliminary Judicial Reports (“PJR’s”) used in foreclosure cases must adhere to its prescribed format. The OTIRB is an insurance rating bureau that includes among its members most title underwriters doing business in Ohio.

Currently, O.R.C. Section 3935.07 prohibits OTIRB members from issuing PJR’s differing from the OTIRB’s version. Previously, OTIRB members could issue varying PJR versions –a practice that is no longer allowed. These varying PJR’s were used primarily in Cuyahoga County Common Pleas Court to conform to the requirements of certain foreclosure magistrates there. These magistrates have been advised that varying PJR’s used in the past can no longer been provided.

In response, the Cuyahoga County Common Pleas Court (“CCCPC”) has circulated a letter to creditors’ foreclosure counsel. The letter advises the CCCPC has written the Ohio Department of Insurance seeking an explanation of the OTIRB’s refusal to allow varying PJR’s as they had in the past. In the meantime, the CCCPC has issued a warning advising that creditors’ foreclosure counsel will be required to file these varying PJR’s. This varying PJR version the CCCPC is requiring is not authorized under Ohio law.

The CCCPC has further advised until this varying PJR is filed in a foreclosure, plaintiff will not be awarded judgment. Prior to awarding plaintiff judgment, the CCCPC plans to issue a Court order requiring plaintiff’s counsel to file this varying PJR within a reasonable period of time. Non-compliance with the Court’s order may result in a sanction against plaintiff’s counsel in the amount of $100 per day until the requested varying PJR is submitted to the Court.

The CCCPC’s announced policy will not delay the filing of new foreclosures but may utlimately delay plaintiff’s award of judgment. The creditors’ foreclosure bar in Ohio has reached a consensus on this issue moving forward. Most, if not all, Ohio foreclosure firms intend to file foreclosures without delay in Cuyahoga County regardless of the CCCPC’s recently announced policy.

Ultimately, our firm remains optimistic this situation will get resolved prior to any new foreclosure filings being impacted or delayed. We anticipate several new developments in the short term and will continue to monitor and provide updates as this situation unfolds.