Kentucky foreclosure is judicial meaning it is handled through the courts. The typical timeline for a Kentucky foreclosure is six months plus or minus.
The first thing a lender must do in a Kentucky foreclosure is file a complaint and Notice of Pending Action known as a Lis Pendens, (LIS). This notice starts the foreclosure process. The county sheriff typically serves the notice of the pending action to the borrower and the borrower then has 20 days to respond. If the borrower fails to respond, the lender asks the court to make a ruling against the borrower. If the court rules against the borrower, a foreclosure sale date is set. The property must be appraised prior to the sale.
In a Kentucky foreclosure,borrowers generally have the right to:
- receive a pre-foreclosure notices, called a “breach letter”
- apply for loss mitigation
- get notice of the foreclosure and the chance to respond in court
- get current on the loan and stop the foreclosure sale
- receive special protections if you’re in the military
- pay off the loan to prevent a sale
- redeem the property after the sale (in some circumstances)
- file for bankruptcy, which does not stop as sale but will slow it
- get any excess money after a foreclosure sale.
Notice of Sale & Auction
The foreclosure sale itself usually occurs at least one month after the court rules against the borrower. The Notice of Sale (NOS) must contain the date, location, and terms of the sale, and it should be published for three weeks in a newspaper. Any postponement of the sale must be decided on through the court and be decreed by court order. In Kentucky Foreclosure, the sale is conducted by a court official referred to as a Master Commissioner. Sales normally occur at the county courthouse, and the highest bidder pis awareded the property.
Kentucky is unique in that the purchaser may pay in cash or post bond to pay in installments.
After the sale, a motion to confirm is heard, and the deed is prepared and presented to the clerk.
If the sale price is less than two-thirds of the appraised value, the borrower has the right to redeem the property from the buyer by paying the sale price plus interest for 12 months from the foreclosure sale date.