Kentucky Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Security Instruments: Mortgage
Right of Redemption Period: 12 Months
Deficiency Judgments Allowed: Yes; Restrictions
Time Frame: Varies; Approximately 150 Days
Public Notice: Complaint
Kentucky is considered to be a lien theory state, which means that property acts as security for a borrower’s loan. In the state, the document that places the lien on a property is called a mortgage. If a lender defaults on their loan, their property may be foreclosed. However, only judicial foreclosures are allowed in the state.
Kentucky foreclosure law allows for a right of redemption period, or the time frame a borrower has to reclaim the property by satisfying the default in full, lasting one (1) year. In the state, if the borrower wants to reclaim the property, they must also pay 10 percent interest in addition to the full sum of the unpaid loan. Right of redemption is only available if the foreclosed property sells for less than 2/3 of the appraised value. Furthermore, the borrower’s right of redemption is marketable and may be sold to a third party.
The state allows lenders to pursue a deficiency judgment in the event that the foreclosed property is sold at auction for less than the amount that is owed on it. If the lender seeks a deficiency judgment, the borrower will be responsible for paying the difference between the default and the amount the foreclosed property was sold for. Deficiency judgments are only available if the borrower was personally served with the foreclosure complaint or was served but did not answer to it.
Types of Foreclosures Allowed in Kentucky
Kentucky statute allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
To start the process, the lender must file a lawsuit in Circuit Court where the property is located against the borrower along with a Lis Pendens, which is a recorded document that provides public notice that the property is being foreclosed. The court is responsible for issuing the final judgment of foreclosure.
Once the foreclosure complaint is filed, the borrower has twenty-one (21) days to answer to the complaint. If not, a default judgment is entered and a notice of sale is issued, advertising the property for sale.
The notice must include information about the foreclosed property as well as the balance that is due on the mortgage. A copy of the notice must be published weekly for three (3) consecutive weeks.
Before the sale, the property must be appraised and if the property sells for less than 2/3 of the appraised value, the borrower will have one (1) year to redeem the property by paying the sale price along with interest.
Hiring a Foreclosure Attorney in Kentucky
Due to the current economic situation, many mortgagors are finding it difficult to keep up with their loans. Many homeowners have lost their jobs or have received a pay cut and have fallen behind with their mortgage payments. When a borrower defaults on their loan, their property may be foreclosed. Receiving a foreclosure complaint can be extremely frightening, but help is available right now to all Kentucky mortgagors. If you have been issued a foreclosure complaint or are behind on your loan, speak to a top foreclosure lawyer in Kentucky right away.
Foreclosure attorneys fight for the rights of all Kentucky homeowners to protect their rights. Your paralegal will do whatever it takes to prevent your home from being repossessed. Your foreclosure attorney will review your financial situation and come up with a plan of action to present to lenders that you both can agree upon as an alternative to foreclosure. Some examples include mortgage modification, refinancing or even a temporary halt in payments. Regardless of the plan, you can rest assured that your foreclosure lawyer will not rest until the best possible outcome for your case is attained.
Whether you are struggling with your mortgage because of issues relating to your job, your spouse’s job or even because of medical bills, foreclosure attorneys will help you to fight for your home. Turn to a leading team of foreclosure attorneys in Kentucky right away to get started on your case and protect your home from being repossessed.