Kentucky is another of the US states which operates with judicial foreclosures only, no non-judicial foreclosures take place. The primary instrument for security on the loan is the property itself and therefore a mortgage lien is issued upon purchase. The power of sale clause is not allowed in mortgage agreements, so this rule also does not apply in Kentucky.
It is difficult to say how long a Kentucky foreclosure takes to finalize as the timeline varies. If the foreclosure is uncontested by the borrower the general rule is about 150 days. Deficiency judgments are allowed on a case by case basis and these generally contain certain restrictions. They will only be granted if the lender serves the borrower with the foreclosure notice personally and also if the borrower does not respond to the summons. The borrower has 20 days to respond to the summons.
Borrowers have rights of redemption if they are able to pay the delinquent amount and costs plus 10% interest. This right of redemption is available for 12 months, and only if the property sold at a value of less than 2/3 of the appraised market value. The redemption right is marketable and may be sold by the home owner to any third party. Prior to the scheduled date of sale the property must be appraised to ascertain what its true value is.
In a Kentucky judicial foreclosure the court decides what debt is owed and decrees this, giving the borrower a certain period of time to rise the amount owing. If the borrower fails to raise these funds the clerk of the court will advertise that the property is for sale. If the borrower abandons the property at any time during the foreclosure process the lender may take immediate possession of it.