Cincinnati vice Mayor Roxanne Qualls has proposed to get rid of so-called ‘toxic titles’ in the city. The vice mayor said doing so could possibly help owners of foreclosed homes in Cincinnati, Ohio, to prevent foreclosures. Toxic titles are home or property titles that remain in the name of homeowners who have been foreclosed or evicted from their homes by lenders; it can occurs not only in Ohio, but also with foreclosed homes in Buffalo, NY or anywhere else.
The idea for the proposal is that banks should be made responsible for the foreclosed homes they have repossessed. Vice Mayor Qualls said it is just logical for such lenders to be held responsible for maintaining those foreclosures. She added that owners of foreclosed homes in Cincinnati, Ohio, should be freed from any tax lien after banks have repossessed their homes as part of foreclosure.
When a foreclosed home is repossessed by a bank, such as a property in Ohio or foreclosures in Whiting, IN, it is not yet entered into the lender’s inventory comprising of free foreclosed properties for sale. This is because in general practice, the title of the foreclosed home remains with the evicted homeowner. Thus, the foreclosed homeowner is still responsible for the property. He would still be possibly cited for any appropriate violation if he fails to abide by the property ownership code of the city.
Ms. Qualls believes that eliminating toxic titles could help owners of foreclosed homes in Cincinnati, Ohio, through making banks realize that it would be more costly for such lenders to repossess homes as part of foreclosures. Thus, banks would rather offer and provide loan modification schemes or significantly delay foreclosure to enable the borrower to gain financial capability to repay. (A similar scheme is contemplated in Buffalo, New York, and in Whiting, IN.)
Ms. Qualls concluded that if the proposal is implemented in the city, it may serve as a significant factor when calculating decisions to foreclose or not to foreclose by banks. This way, owners of foreclosed homes could be spared from further devastation brought about by foreclosures.
Owners of foreclosed homes in Buffalo, NY, are also calling for a similar action in the city. This would also serve right for foreclosures in Whiting, IN. If the proposal is approved and implemented, regulations over foreclosures in Cincinnati could serve as a precedent or model for all other foreclosure markets in the country.
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