What is a Foreclosure and How Do I Avoid It?

What is a Foreclosure?

The word “foreclosure” is one of the most alarming terms a homeowner can hear. Simply put, someone in foreclosure usually cannot afford his or her home anymore. When a homeowner is unable to make full principal and interest payments on the mortgage, the lender is allowed to seize the property, evict the homeowner, and sell the home… Yikes.

Hundreds of homes in Louisville, KY go into the foreclosure every month. So if you have been served foreclosure paperwork, don’t fear; you are not the only one! Keep reading to learn more about what happens in a foreclosure and how you can avoid it.

Foreclosure Timeline

Screen Shot 2015-02-09 at 12.03.31 PMIn order to explain what happens in a foreclosure, we must first look at Kentucky state law. You see, foreclosure laws vary by state, depending on whether the state is “judicial” or “non-judicial.” For starters, Kentucky foreclosures go through a judicial process, which means the courts handle them. In a judicial procedure, the foreclosing party files a lawsuit against the borrower in court.

So what happens in a foreclosure? The very first thing that happens is that the homeowner will receive a complaint and notice of pending action, known as a Lis Pendens.

The homeowner or borrower has 20 days to respond to the Lis Pendens. If the borrower does not respond, the lender (usually a bank) asks the court to make a ruling. If the court rules against the borrower, a foreclosure sale date is set.

The foreclosure sale date is usually several weeks or months out from this point. The sale takes the form of an auction and is conducted by a court official called a master commissioner. The auction sale usually takes place at a courthouse and the highest bidder purchases the property. Depending on the court schedule, the whole foreclosure process can take 150 days or more.

Are There Other Options Besides Foreclosure?

YES. There are several options available if you are being foreclosed on. If you want to keep your home, you can get a loan modification. LST Properties will work with you and advocate to the lender on your behalf to prevent a foreclosure. If this sounds like a good solution for you, call us right now at 502.822.3633.

If you want to sell your home, LST Properties can help you go through the process of a short sale. A short sale allows you to walk away from the house and the debt. If you would like to sell your house through a short sale to avoid foreclosure, call us right now at 502.822-3633.

No matter what, we are committed to educating you and helping you make the best decision for YOU. LST Properties has worked with dozens of homeowners in Louisville, KY who have been in your same situation.

Have any questions? Contact us. We can help ease your foreclosure concerns.

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