Foreclosure Laws in Kentucky (KY)Topic: Foreclosure
Kentucky is one of the states that allows only judicial or in-court foreclosure. This means that the bank must file a lawsuit against the homeowner who is having difficulties making his house payments to get the court permission to proceed towards the sale of the house. In such a situation the court will decree the amount of money the homeowner must pay the bank and also gives them a short time in which to pay that money. If the homeowner should fail to pay that money in the allotted time frame, the clerk of the court will then be required to advertise the sale of the home. Kentucky requires that an appraisal of the property be conducted. If the highest bid price at the foreclosure happens to be less than two thirds of the appraised value of the home owner is given a 12 month right of redemption. This means that they have twelve months following the sale to come up with the sale price the home was sold for plus interest. If they choose to do this and if they can pay that much money in that given twelve months, then they can regain ownership of the home. If, in this state, the homeowner was personally served with a lawsuit or failed to answer the lawsuit, then deficiency judgment may be sought by the bank.
Deficiency judgments are rarely sought in such cases. If the former home owner does have other assets or property which could be used to pay this deficiency, the bank will pursue this avenue if it can. In Kentucky, If the property has been abandoned by the homeowner, the bank can foreclose without a court order to do so. In the typical foreclosure used in this state, the 1st step is that the bank's lawyer files a complaint along with a notice of pending action called a 'Lis Pendens'. This is simply a public announcement of the bank's intention to sell the home. Next, the sheriff of the county in which the home is located will deliver the notice of pending action to the homeowner. Then, this person is given twenty days to respond to this notice. If the homeowner does not respond to this notice, the bank will request that the court make a ruling in the case. The court will most likely rule against the homeowner at this time and will set a date for the foreclosure sale. The sale typically occurs one month after the court has ruled against the homeowner. A notice of sale must be advertised or published in a local newspaper with circulation in the county where the home is located. This ad or notice must contain the place and terms of the sale along with the date it will be held. This ad must be run once a week for three weeks leading up to the scheduled sale date. Postponements may occur at the banks discretion. Such a postponement must be arranged through a court order. Most all foreclosure sales in this state are held at the courthouse of the county in which the home is located. The sale is conducted by a court official. This person's title is the master commissioner.
The sale is held auction style, with the home being awarded to the highest bidder at the sale. This winning bidder needs to either pay the amount bid in cash or post a bond to pay in installments. After the sale is complete, a motion to confirm the sale is by the court. Following this hearing, the deed is prepared and presented to the clerk of the court.
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called a short sale and looked at both the veinpoiwt of the homeowner and of the lender (see Basics of Short Sales: Part 1). There are many homeowners who are nearing foreclosure and would like to short sale their home,
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