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Kentucky Judicial Foreclosure Available: Yes Non-judicial Foreclosure Available: Effectively,
no Kentucky has a rigid rule on foreclosures: no
out-of-court foreclosures are valid other than voluntary sales by the
borrower. A deed of trust sale, a power of sale clause in a mortgage or sale
by a trustee will not work in Kentucky. The only forced foreclosure sale that
is permitted is one pursuant to a court order. Also, common law or strict
foreclosure is forbidden in Kentucky. The lender must be prepared to engage
in litigation to foreclose in the state of Kentucky. Often the lender can win
by default or summary judgment but, if not, the case is tried to a jury. Possession On the other hand, if the borrower abandons the
home, the lender may obtain possession of the property once the borrower goes
into default. The lender may operate the property for the benefit of the
borrower. Any income produced goes to the lender, not the borrower, but will
be credited toward paying off what the borrower owes. If the borrower does
not abandon the home, the lender may not take possession until the court
confirms the foreclosure sale. Redemption and Appraisal Prior to a foreclosure sale, the property must be
appraised. If the actual foreclosure sale price is less than two-thirds of
the appraised value, then for one year after the sale the borrower has the
right to redeem the property from the buyer for the buyer's purchase price
plus ten percent interest. Interestingly, the borrower's right to redeem may
also be sold. Deficiency Judgment In Kentucky, it is possible to obtain a deficiency
judgment against the borrower for the difference between the amount the
borrower owed on the old loan and the foreclosure sale price, but only if the
borrower was personally served with the lawsuit, or failed to answer. |
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