Senior Loan Officer
|—||Kentucky USDA Guaranteed Rural Housing Loans
Did you know that home buyers can still get a mortgage with no money down, even with less than perfect credit? The Kentucky Guaranteed Rural Housing Loan Program offers these options in a wide range of areas, including many suburbs.
This loan program is offered through the Kentucky Rural Housing Service, an agency of the U.S. Department of Agriculture and designed to assist low and moderate-income residents by providing better access to affordable housing finance options including little or no out-of-pocket costs in eligible areas.
Call me today to learn more about this program.
Senior Loan Officer
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
One of the hardest decisions a family has to make is deciding to surrender their home in a bankruptcy proceeding. Often times, this means allowing a home to go through the foreclosure process and discharging their mortgage obligations in a Chapter 7 bankruptcy. Many homeowners are concerned about the foreclosure process and their obligations to their mortgage company once their bankruptcy process is complete.
Often times, when a person chooses to surrender their home in bankruptcy, he is in the middle of the foreclosure process. Filing a bankruptcy petition creates an automatic stay, which puts an immediate halt to the foreclosure process.
The mortgage company may then choose to either file a motion with the court to re-start the foreclosure process (called a motion to terminate the automatic stay) during the 90 days of the Chapter 7 process or wait until the Chapter 7 is discharged to initiate the process again. Either way, foreclosure is a long, legal process and it often takes anywhere from four to eight months for the house to be sold at the foreclosure sale. Regardless of when the bankruptcy is complete, the home still belongs to the homeowner until the home is sold at the commissioner’s sale.
In order to understand why bankruptcy may not be immediately necessary in order to get out from under a mortgage, one needs to understand how the foreclosure process works. In most states, including Kentucky and Indiana, creditors are required to utilize a process called judicial foreclosure.
The way it works is this. Once there has been a default, the creditor initiates the foreclosure process by filing a Complaint in the Circuit Court of the county where the property is located. The creditor must then obtain service of the Complaint on the debtor in a manner permitted by law. Once service has been obtained, the debtor then has 20 days to answer the Complaint. The purpose of this is to allow the debtor to assert any defenses that he may have. If the debtor fails to file an Answer to the Complaint, then the creditor gets a default judgment.
After obtaining a default judgment against the debtor, the creditor may then proceed to obtain a sale date. Normally it takes at least 4 months or longer from the time of service of the Complaint until the sale date. On the sale date, the property is auctioned off at the courthouse to the highest bidder. The proceeds of the sale are then credited to the loan, and what is left over, referred to as the deficiency balance, is what the debtor owes the creditor.
If the property sells for enough to cover the balance of the loan, then there is no debt that is owed by the debtor. So until such time that the property actually sells at foreclosure, it is impossible to know for sure how much the debtor will actually get stuck with. So if you owe $150,000 on your mortgage, this does not mean that you personally are on the hook for that amount. If the house sells for $140,000, then you only owe the $10,000 difference.
So before you decide that you need to file bankruptcy solely because your home is going into foreclosure, you may want to wait and see what the outcome is from the foreclosure sale. You may owe less than you think. Now if you have other reasons for filing bankruptcy, such as credit card or medical debt that you can’t pay, then it makes sense to go ahead with the filing. But if it is all about your mortgage, you may want to wait and see what the damages are before pulling the trigger on a bankruptcy filing.
Stewart Title Guaranty Companytitle reportSenior LoanLouisville, KYinsurance policiesinsuredchain of titlehome ownerLeaseholdLoan OfficerHurstbournelegal descriptionproperty
The title report which is also known as the Preliminary Title contains several schedules and these schedules can differ depending on the state where the property is located. The title usually begins with a “Schedule A”. This schedule indicates the property being insured, the legal description of the property being insured, the insured, the amount of insurance for the mortgagee and the fee owner. If there is leasehold then there would be Leasehold policy.
Schedule B indicates the history of the property also known as the chain of title. The report also indicates the survey boundaries, tax history and indicates if there are any open taxes, judgments, liens, easements of record and any or all clouds on the title.
Title insurance protects the insured from claims regarding ownership of the property, liens against the property, and marketability of title to the property. The Rounsavall Title Group, in its capacity as an agent of Stewart Title Guaranty Company, offers two types of policies: the mortgagee policy which protects the lender, and the owner’s policy which protects the buyer.
According to the mortgagee policy, when a claim results in a total loss of title, the title insurance company shall take all steps necessary to defend the claim on behalf of the insured entity. In other words, the lender could ultimately be compensated for any loss they might suffer as a result of a title claim, for a claim could negatively impact their collateral interest in the property. Almost every lender today requires that you purchase this policy on their behalf at the closing of the loan. Keep in mind that this lender’s policy only protects the lender, and does not afford any protection to the home owner. So in the event of a claim, an uninsured home owner would still be responsible for repaying the debt to the lender despite the fact that they may no longer actually own the property. Furthermore, the uninsured home owner could lose any and all of the equity they have established in their home.
As such, we strongly recommend that every home owner obtain an owner’s title insurance policy in order to be fully protected in the event of a claim. It insures against the loss they may suffer, and typically includes reimbursement to the home owner for court costs and fees associated with the claim. Unlike other insurance policies you might get, this is a one time premium, and once purchased, is effective for the rest of the home owner’s life.