Overview of Kentucky Foreclosure Laws:
- Judicial Foreclosure State: Requires a Court ordered sale
- Primary Security Instrument: Mortgage
- Timeline: Varies depending on the amount of litigation
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Kentucky, lenders and judicial liens foreclose on homes by using the judicial foreclosure process. Other states use a deed of trust to foreclose on a home. In Kentucky, most foreclosures take about 6 months or less if done by default. If litigated, foreclosures often take a year or more.
Judicial foreclosures require a court decree and an advertised sale of the home. You do have the right to redeem your home but the borrower is given only a short time to pay the entire loan off. If the borrower fails to pay within that time, the Commissioner then advertises and holds a sale of the property.
At some point prior to the scheduled date of foreclosure, an appraisal of the property must be made. If the foreclosure sale price is less than two-thirds of the appraised value, the borrower has a period of one year from the date of the sale to redeem the property by paying the amount for which the property was sold, plus interest. However, the bank almost always bids over this amount at the foreclosure sale preventing a redemption.
It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price, but only if the borrower was personally served with the lawsuit, loses the lawsuit, or failed to answer. Please beware of Rescue scams claiming to help you stop a Kentucky foreclosure and here is a timeline of the foreclosure process.
If you have had a lawsuit filed against you then seek an attorney immediately to answer the lawsuit or file a bankruptcy to save your home.