Two methods to stop a foreclosure.
Kentucky allows a person who went through a foreclosure sale the ability to repurchase their home if the loan was for a low amount. Under KRS 426.530 if the property sold at foreclosure for less than two-thirds (2/3) of its appraised value, the prior owner can redeem it (purchase it back) from the new owner within six (6) months from the day of sale, by paying the purchase money and ten percent (10%) per annum interest, and any reasonable costs incurred by the purchaser after the sale for maintenance or repair of the property, including but not limited to utility expenses, insurance, association fees, taxes, and the costs to conform the property to the minimum standards of local codes. The defendant only needs to pay the redemption to the court clerk and then the commissioner will immediately convey the property back. This is why mortgage companies often bid 70% of the mortgage when they bid at foreclosures. Bidding over 66% cuts off the rights of the homeowner to redeem the property from foreclosure.
Kentucky TILA Rescission
If you refinanced your home in the last three years, the Truth in Lending Act (TILA), often gives you the grounds to rescind a home mortgage. One of the common mistakes at closings is the failure to give borrowers two copies of the notice of right to rescind. Even if the note and mortgage is just to one spouse the other spouse has the right to also be given notice. Under the Truth in Lending Act if the loan is invalid, the loan default is also invalid, which stops a foreclosure. Invoking the right of rescission is just one of many rights and defenses. You often have several defenses to help you save a home.
You probably remember all of the paperwork and all documents you had to supply to purchase your home or refinanced it. You had to supply a copy of your taxes, pay stubs, any prior bankruptcy, and proof of citizenship. You had to explain where the down payment came from, prove that you will live there, along with numerous other items.
The reason for the Truth in Lending Act is to protect borrowers from hidden fees, fraudulent or deceitful practices, and sloppy paperwork you commonly find in mortgage loans. The Truth in Lending Act gives borrowers the benefit of the doubt. The TILA right of rescission will temporarily stop a foreclosure and may allow a borrower to walk away from the foreclosure. Although damages under the statute are often small, a lender may offer a modification or workout as a response.
The reason you went through all that paperwork in buying the home is to insure that laws like the Truth in Lending Act (TILA) are being complied with. When defending a foreclosure it’s time to make sure these laws were complied with. The truth in lending act requires that the mortgage lender obtains and discloses to the borrower specific information and documents. TILA requires mortgage companies and banks to provide two copies of the right to cancel (one for each spouse or co-debtor). If two copies are not provided at closing the homeowner or borrower has three years to rescind the transaction, plus the borrower may recover damages.
We have been recognized in Avvo (who ranks us 10 out of 10) and in Google (who ranks us 5 out of 5) as the highest ranked bankruptcy and foreclosure attorney in Kentucky for 2012, 2013, 2014 and 2015 based on the ratings from other attorneys and clients. Threebestrated.com ranks us as one of the top 3 offices for bankruptcy and foreclosure in Louisville and obtaining consistently favorable results for clients. We represent distressed homeowners in Kentucky and southern Indiana.
Contact us about your foreclosure today at 625-0905