If you’re a Kentucky homeowner who’s fallen behind on your mortgage payments, you may be wondering what happens during a foreclosure in your state. For starters, Kentucky foreclosures go through a judicial process, which means the courts handle them. You’ll learn about the foreclosure when you receive a summons and complaint, and you’ll get a certain amount of time to file an answer with the court. Read on to learn how much time you get to respond to the complaint, whether you can reinstate the mortgage before the sale, if you’ll have to pay a deficiency judgment after the foreclosure, and more.
Below you’ll find a summary of some of the main aspects of Kentucky foreclosure law along with citations to the statutes so you can read the law yourself.
Finding Kentucky’s Foreclosure Laws
Kentucky’s foreclosure statutes are primarily located in Chapter 426 of the Kentucky Revised Statutes.
Main Features of Kentucky’s Foreclosure Laws
We’ve summarized important parts of Kentucky’s foreclosure laws below. You can find more detailed articles on various aspects of Kentucky foreclosure law in Nolo’s Kentucky Foreclosure Law Center.
Most Common Type of Foreclosure Procedure in Kentucky
Foreclosures in the state of Kentucky are judicial, which means the foreclosing party must file a lawsuit in court. (Learn more about judicial foreclosures.)
Notice of the Foreclosure
In Kentucky, the foreclosing party gives the borrower notice of the lawsuit by serving him or her with a summons and complaint. The borrower gets 20 days after service to file a response to the complaint. (Learn more about the difference between a foreclosure summons and complaint.)
If the foreclosing party wins the lawsuit, the property is sold and the proceeds go towards paying off the mortgage debt. Before the sale, a notice of sale must be posted on the courthouse door (and three other places) and published in a newspaper. Ky. Rev. Stat. Ann. § 426.200, 424.130, 426.560.
Special Foreclosure Protections in Kentucky
Kentucky law provides special protections against foreclosure to some military service members and to borrowers who take out a “high-cost home loan.” (A high-cost home loan is a loan that has particular characteristics, such as points and fees that are greater than a specified amount.)
Protections against foreclosure for certain military service members. Kentucky law extends the protections of the federal Servicemembers Civil Relief Act to members of the state national guard ordered to state active duty by the governor for a period of 30 days or more. Ky. Rev. Stat. Ann. § 38.510.
Protections regarding high-cost home loans. Before it can file a complaint to foreclose a high-cost home loan, the foreclosing party must provide a notice of default to the borrower that gives 30 days to cure the default and reinstate the mortgage. Ky. Rev. Stat. Ann. § 360.100.
Right to Reinstate the Mortgage Before the Foreclosure Sale in Kentucky
“Reinstating” is when the borrower catches up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Under Kentucky law, the borrower does not get the right to reinstate before the sale unless the loan is a high-cost home loan. However, the terms of the mortgage contract itself may permit the borrower to reinstate or the foreclosing party may agree to a reinstatement.
Right of Redemption After the Foreclosure Sale in Kentucky
In some states, the borrower can redeem (repurchase) the home within a certain period of time after the foreclosure.
If the home sells for less than two-thirds of its appraised value at the foreclosure sale, the borrower gets six months to redeem the home. Ky. Rev. Stat. Ann. § 426.530. (To get details on redemption rights in Kentucky, see Nolo’s article If I lose my home to foreclosure in Kentucky, can I get it back?)
Kentucky’s Deficiency Laws
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the foreclosing party to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
Kentucky law permits the foreclosing party to get a deficiency judgment if the lender personally serves the complaint to the borrower. Ky. Rev. Stat. Ann. § 426.005. A personal judgment is not allowed against a defendant who is constructively summoned, and who has not appeared in the action. Ky. Rev. Stat. Ann. § 454.165. (For a summary of the deficiency law in Kentucky, see Kentucky Laws on Post-Foreclosure Deficiency Judgments.)
Notice to Leave After the Foreclosure Sale
In Kentucky, the purchaser from the foreclosure sale is entitled to possession of the property after ten days notice to the former owners. Ky. Rev. Stat. Ann. § 426.260.