Mortgage Note Investing in Ohio

Ohio is a steady source of distressed-note inventory across its industrial markets, but it's a judicial-foreclosure state, so the timeline and costs run longer than the non-judicial South. A lender files in the county common pleas court, the property is appraised, and a sheriff conducts the sale (Ohio Rev. Code Ch. 2329); contested cases routinely run the better part of a year. Price in both the time and the higher legal cost before you bid.

Ohio's redemption rule is a timing nuance worth understanding precisely. The borrower's equity of redemption runs only until the court confirms the sheriff's sale (Ohio Rev. Code §2329.33) — there is no post-confirmation redemption period. Your redemption exposure therefore lives entirely in the window between the auction and the court's confirmation entry; once confirmed, the title transfers free of the borrower's right to buy it back.

The signature Ohio gotcha is fee recovery. It is settled Ohio public policy that an attorney-fee clause triggered purely by default in a residential mortgage is an unenforceable penalty — the rule of Leavans v. Ohio Natl. Bank (1893) and Miller v. Kyle (1911), which the Ohio Supreme Court expressly left intact in Wilborn v. Bank One (2009) (Wilborn allowed such fees only as a voluntary condition of reinstating the loan, not on foreclosure). So model a residential Ohio note's net recovery without adding your foreclosure attorney fees to the payoff. Deficiency judgments are available, but a residential one-to-two-family deficiency becomes unenforceable two years after the sale is confirmed (Ohio Rev. Code §2329.08). Ohio is not a super-lien state — a recorded first mortgage outranks condo and HOA assessment liens.