Kentucky Foreclosure Laws

Kentucky Foreclosure Law

Kentucky foreclosure laws advocates settlement of foreclosure disputes thorough a judicial process. Non judicial processes are discouraged. A deed of trust sale is also discouraged. Procedures like sale enforced by a power of sale clause or sale of foreclosure property by a trustee is also not looked upon kindly.

The Foreclosure Procedures in Kentucky

Kentucky Foreclosure Law supports voluntary sale of property by the borrower to settle his dues to the lender. The borrower is given even more support by being allowed the right of redemption. The lender can look forward to being allowed a deficiency judgment but with several restrictions. It is only when the distressed property is deserted by the defaulting borrower that the lender can take possession of the property. Under such conditions the lender is entitled to sell the property. However, the sale value of the property has to be accounted for and the defaulting borrower's liability is reduced by the amount derived from the sale. In the event of the borrower not having deserted the distressed property the lender may hold a foreclosure sale but cannot take possession of the property till the court clears the procedure.

What is Next?

In case the appraised value of the distressed property prior to the foreclosure proceedings is less than two thirds of the foreclosure sale value then the borrower is awarded a grace period of one year to redeem the distressed property. In such a case the amount that the borrower will be required to pay for redemption of the repossessed property is the price paid by the buyer plus a ten percent interest.

The lawsuit for real estate foreclosures must be filed in a circuit court of the county where the property is situated. The notice of intent to sell must also be filed in court and sent to the borrower. The borrower is given a period of twenty one days to respond to the notice as per the terms mentioned therein. In case of no response a default judgment in pronounced by the court. The other different types of judgment that may be given in a foreclosure property case are summary judgment or agreed judgment.

As in all other states of the US an advertisement regarding the sale should be published in a newspaper of the region for three continuous weeks. In Kentucky the foreclosure sale proceedings are held on the courthouse steps.