Foreclosure is the procedure through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Cold Spring, Kentucky has consistently failed to make their payments. Foreclosure often requires the house to be sold at auction. Often, banks want to get rid of the property as soon as they can, in order to collect as much money as possible, and move forward.

In all states in the U.S., including Kentucky, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a good effort to get a reasonable price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Cold Spring, Kentucky to see if this is the case. However, this usually doesn't apply if the mortgage has been refinanced.

How Can I Avoid Foreclosure in Kentucky?

First and foremost, you should not dismiss the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this may seem, you should stay in contact with your creditor, and be honest with them. You should remember that banks in Cold Spring don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.

If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. You may also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a comparatively small loss, and allows the homeowner to keep their home.

How Can A Cold Spring, Kentucky Attorney Help?

If you think foreclosure is imminent, a good Cold Spring, Kentucky lawyer may be your best hope for staving it off. Even if keeping the house proves impossible, a good attorney can minimize the financial effects.