Today I had a questioned asked about a property that was not listed on the MLS.  After asking more questions come to find out the property has been setting vacant for several months.  The questions is asked "how can I buy" this house?  That is when I start the explansion of how a lender will file and start the foreclosure process.  Basicly here it is: 

Pre-foreclosure Period

In Kentucky the foreclosure occurs under a court order.  The only exception is with abandoned properties, where a lender may take possession once a borrower defaults or if the owner give deed in liu of Foreclosure.

A complaint and notice of pending action (Lis Pendens) are filed to start the foreclosure process. The sheriff typically delivers a notice of the pending action to the borrower, who has 20 days to respond. If the borrower fails to respond, the lender asks the court to make a ruling. If the court rules against the borrower, a foreclosure sale date is set. The property must be appraised prior to the sale. 

Notice of Sale / Auction

The sale usually occurs at least one month after the court rules against the borrower. The notice of sale must contain the date, location, and terms of the sale, and it should be published for three weeks in a newspaper. (in the norhern Kentucky are check out the Friday Enquirer)   Check out Kenton County Commissioner and Campbell County Commissioner for the most recent commissioner sales.  Any postponement of the sale must occur through a court order. The sale, conducted by a court official called a master commissioner, usually occurs at the courthouse "steps", and the highest bidder purchases the property. The purchaser may pay in cash or post bond to pay in installments. After the sale, a motion to confirm is heard, and the deed is prepared and presented to the clerk.  Normally the highest bidder is going to be the lien holder, in other words the bank that has the loan on the property.

If the sale price is less than two-thirds of the appraised value, the borrower has the right to redeem the property from the buyer by paying the sale price plus interest. This redemption period lasts for one year from the foreclosure sale date. 

What do you do?

Which is why when buyers call me asking about a vacant property that they want to buy, unfortanitly I tell them give me the address and I'll keep an eye on it for you.  On the flip side of the properties that the bank purchase at the courthouse steps normally will be coming onto the MLS with a REO listing agent.  

As always if you have questions please ask,