Foreclosure & Alternatives Law
Going through the Kentucky foreclosure process can be a very stressful time for any homeowner. There may be parts of the process that are confusing because of the legalities involved. In order to understand what your legal options are, it is advised that you speak with an experienced attorney.
When a homeowner does not make the promised payments on his or her mortgage, second mortgage or home equity loan, it is called default. When this occurs, the lender will send a notice of default to the homeowner. This is what is called the pre-foreclosure phase. This could come as early as 60 to 90 past due.
Kentucky does not allow non-judicial foreclosures. That means that the final foreclosure judgment has to be issued by the court. In order to begin the foreclosure process, the lender files a complaint with the circuit court in the county where the property is located. There will also be an “action pending” notice filed. This notice will let anyone know who is looking at the property deed that the lender has started the foreclosure process on the property.
The homeowner will be served a notice of foreclosure by a warning order attorney or the sheriff. This summons will give the homeowner 20 days to file answer to the foreclosure complaint. If the homeowner files an answer, then a commissioner’s hearing may be scheduled and held to determine if the homeowner has a legitimate response or defense to a summary judgment. A summary judgment is one that is issued without a full trial.
If the homeowner does not file an answer to the summons, then the lender will ask the court for a default judgment. The commissioner will write a recommendation to the judge as to whether the foreclosure judgment should be signed. If the judge signs the judgment, then the commission will issue a notice of sale.
Two appraisers must drive by the property and do an inspection. The notice of sale is then posted near or at the property. It must also be advertised three weeks in a row in the county’s local paper before the sale date.
The sale of foreclosed property in Kentucky is done at a public auction. The commissioner’s office conducts the sale. In most cases, the lender will make the opening bid for the loan amount. The highest bidder will win the auction.
If the homeowner acts before the property has a new owner, it may be possible for him or her to negotiate a new solution with the lender. The lender, though, is not required to accept any offer by the homeowner.
The homeowner has a year to buy the property back if it sold for under two-thirds of what it appraised at. There would also be a fee of 10 percent of the selling price that must be paid.
As you can see, this process is very complex. The time it takes for a foreclosure to be final can be several months, but it depends on how busy the circuit court is, too. Understanding what legal options are available to stop foreclosure is important. This is where an experienced attorney comes in. He or she can review where you stand with your home and what options are best for your current situation.