A Kentucky homebuyer defaults on her mortgage loan. The lender wants to recover the property. Which process must the lender follow under Kentucky law?
Correct Answer
D) File a lawsuit in court, obtain a judgment, and conduct a sheriff's sale through judicial foreclosure
Kentucky is a strictly judicial foreclosure state. When a mortgagor defaults, the lender (mortgagee) must file a lawsuit in circuit court, obtain a court judgment, and then conduct a sheriff's sale of the property. This process is governed by KRS Chapter 426. There is no power-of-sale or non-judicial foreclosure option in Kentucky. The process typically takes 6–18 months.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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