Louisville Kentucky Foreclosure Law Help
A Deed in Lieu of Foreclosure is when you sign over the Deed to the Mortgage Company. They may agree in exchange to not pursue you for the default but they normally file an IRS 1099 form stating that they forgave you the debt to get a tax deduction and you get the tax bill for the forgiveness of debt as income. A Deed in Lieu often saves the mortgage company the expense. But you lose the right to stay in the property while the foreclosure is pending. That is often like free rent for a year or more. You are not required to simply sign over your home. Instead you can fight back and stay in the home by answering the lawsuit or filing bankruptcy.
A short sale or deed in lieu can make you liable for taxes, and have other costs that can be eliminated if you fight the foreclosure instead. A deed in lieu or short sale will still harm your credit often just as much as the foreclosure or Chapter 7 or Chapter 13 would have. You do have the right to fight back by filing an answer and making the mortgage company prove their right to take the home. Often the company filing the lawsuit may not even own the mortgage, have the records, or may not have filed the records properly.
Staying in the home free until the house is sold allows people to save up house payments they would have made to pay an amount down on a new home or lease with an option to buy. Under Kentucky laws and regulations most people will qualify for a prime rate government mortgages 2 years after filing bankruptcy (if no foreclosure is involved) or 3 years after foreclosure.
The foreclosure process can take only 3 months if you fail to file an answer. If you properly file an answer the foreclosure process should take at least 6 months and can often take 1-2 years. Under Kentucky law a foreclosure is required to transfer the home to the bank unless you agree to some other method to transfer a home. If you are stuck in a bad mortgage situation see us for help.
Nick C. Thompson Louisville Kentucky Foreclosure Attorney
