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*Important Alert! There are “copycat” Web sites posing as HHF application sites. The Kentucky Housing Corporation, through the
Homeownership Protection Center and the Unemployment Bridge Program, is the only agency authorized to administer Hardest-Hit Funds in
Kentucky. If you are suspicious that the Web site you are using is not the correct site, contact our toll-free information line at (866) 830-7868 to
verify the Web site address. Application for and participation in the Unemployment Bridge Program and Kentucky's Hardest-Hit Funds is
FREE-OF-CHARGE and you will not be asked to pay for any services in conjunction with applying for or participating in the program.
Disclaimer: If you have been served with a formal Petition or a court action of Foreclosure by your lender please seek legal advice
immediately. Kentucky Housing Corporation and/or the Kentucky Homeownership Protection Center cannot provide legal advice. While the Kentucky
Homeownership Protection Center can refer you to Legal Aid agencies, you must meet the eligibility requirements and case acceptance guidelines set by
Legal Aid for your case to be accepted. Please note that contacting the Kentucky Homeownership Protection Center, a counseling agency, or Legal Aid
does NOT automatically address or delay any legal foreclosure process that has been filed against you. It is your responsibility to seek further legal
advice if Legal Aid is not able to take your case.
The Kentucky Homeownership Protection Center was established by the 2008 Kentucky General Assembly to address the foreclosure crisis here in
Kentucky. The Kentucky Homeownership Protection Center is a joint effort of the Department of Financial Institutions, Kentucky Housing Corporation and
many other agencies and groups across the state. The Kentucky Homeownership Protection Center is administered by Kentucky Housing Corporation.
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About Foreclosure Page 1 of 1
About Foreclosure
z Foreclosure is the legal means to repossess or take over a home. Kentucky is a judicial state, meaning that most, if not all, foreclosures are
processed through the courts. Therefore, the time for a foreclosure in Kentucky varies from county to county, but loan servicers usually allow 90
days before starting foreclosure proceedings.
z Call your servicer as soon as you know you are having financial problems. Do not wait until you miss your first payment. Explain the situation and
try to work out a plan with them to make the loan current. Despite what you may think, loan servicers do not want to take your home from you. The
foreclosure process is costly to them and they would rather find a mutually agreeable solution that keeps you in your home.
z If you are unable to work with your servicer, contact us immediately to find alternatives. The Protection Center is the only statewide assistance
program created by the Commonwealth of Kentucky and endorsed by Governor Steve Beshear. Please do not be fooled by all the “credit repair”
scams going on. The Protection Center provides access to many counselors and attorneys to help you work with your servicer or to better
understand how to avoid further problems at no cost to you.
Helpful Advice
z Open notices from your mortgage loan servicer and respond to them promptly.
z Some businesses could be scams that appear legitimate. Do not sign anything unless you have a reputable attorney or counselor review the
documents. Contact us to find one in your area.
z Prioritize your debt. Make a list of monthly expenses and compare it to your income. For a simple budget tracking worksheet, click here.
z Eliminate unnecessary bills, like a cell phone or cable television, which may be eating-up too much of your income.
z Evaluate liquid assets that can be sold, like jewelry, investments or whole life insurance, which may help bring you up-to-date on mortgage
payments.
z Pay bills on time. Even if you only pay the minimum payment, it keeps you in good standing with the creditor.
z Check your credit report every year. Federal law allows all Americans to do this yearly for FREE. Visit www.annualcreditreport.com to get your free
credit report and report any errors to the credit bureau that has the inaccurate information.
z Should you need legal assistance, here is a complete list of Legal Aid Agencies and the counties they each cover.
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Alternatives Page 1 of 2
Alternatives to Foreclosure
Work Out Process/Loss Mitigation
By calling your mortgage loan servicer as soon as you know you may have a problem making your monthly mortgage payments, you enable them and
yourself more time to find a solution. Keep in mind that as long as a sale on your home is not final, a work out process can still take place, but the earlier
in the process you begin discussions, the more likely it is.
It is common practice to begin the work out process by asking specifically for the servicer's loss mitigation department, if one exists. Always record by
noting the time, date and person with whom you speak and ask for all agreements to be confirmed in writing.
The loss mitigation department will require certain documents to complete a work out package for you:
z Completed application form
z Completed budget
It may take a loss mitigation specialist a few weeks or even months to report back to you with the decision about the work out plan. There are many
alternatives to foreclosure listed below. You should regularly check with the loss mitigation specialist about the status so your request does not get lost.
The collection department may keep contacting you trying to collect on the debt. This may continue until the work out process is final.
If the servicer is unwilling or unable to work out an agreeable solution for you, you are allowed to contact the mortgage note holder directly. Depending on
your type of loan, it is sometimes difficult to figure out who this is. Under the 1995 amendment to the Truth-in-Lending Act, the servicer is required, upon
written request, to provide you with the name, address and telephone number of the mortgage holder.
If you feel you need more help during the work out process, you can always contact us. A counselor can help you gather the information you need and
better understand the process.
Special Forbearance
Your servicer may agree to a repayment plan to bring the loan current based on your financial situation. This can be done by either suspending or
reducing the payments until you are able to recover from a financial setback. You may qualify for this if you have recently lost your source of income or
had an unexpected increase in living expenses. You must furnish information to the lender to show you will be able to meet the requirements of the new
payment plan. You will be responsible for repaying the delinquency over a period of time.
Loan Modification
A loan modification is a change in one or more of the loan terms. Options could include lowering the interest rate on the loan, extending the period of the
loan or re-amortizing the loan where the delinquent amount is added to the principal balance and the loan is brought current. This will help you catch up
by possibly reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem but your net
income is less than it was before the default.
Partial Claim
You may be able to obtain an interest-free loan from the U.S. Department of Housing and Urban Development (HUD) to bring your mortgage current. You
may qualify if your loan is at least four months delinquent, but no more than 12 months delinquent, and you are able to begin making full mortgage
payments. If your loan is in foreclosure, the servicer could take it out of foreclosure to do a partial claim.
When you lender files a partial claim, HUD will pay your servicer the amount necessary to bring your mortgage current. You must execute a promissory
note, placing a lien on your property until the note is paid in full. The note is interest-free and is due if you sell or leave your property or when your
mortgage matures.
Fannie Mae now offers a partial claim product called HomeSaver® Advance. HomeSaver® Advance is an alternative for eligible homeowners who are in
default on their first mortgage. It is documented by a promissory note, executed by the homeowner and payable over 15 years at a fixed rate of 5 percent
with no payments or interest accrual for the first 6 months.
Pre-Foreclosure Sale
By selling your home before the foreclosure is final, you can pay off your mortgage, avoid foreclosure and prevent further damage to your credit rating.
You may qualify for this option if 1) the “as is” appraised value of your home is at least 63 percent of the amount you owe and the sales price is 82
percent of the appraised value; 2) the loan is at least two months delinquent prior to the pre-foreclosure sale closing date; and 3) you are able to sell your
house within three to five months, depending on what your lender agrees to. Also known as a short sale, this work out option is sometimes available when
property values have declined since the mortgage was issued.
Deed-In-Lieu of Foreclosure
If it is evident that you are unable to recover from your financial difficulties while paying a mortgage, you may qualify to voluntarily “give back” the property
to the lender. Even though you lose your house, this provides a better chance for you to get another mortgage in the future. You may qualify for this
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Alternatives Page 2 of 2
option if 1) you are in default and do not qualify for any other options; 2) your attempts to sell the house before foreclosure were unsuccessful; and 3) you
have no other liens or mortgages on the property or any other mortgages in default. Most likely a servicer will not accept a deed-in-lieu unless all
foreclosure fees are paid. By contacting your servicer or us as soon as you have a financial problem, you guarantee more possibilities being available to
you.
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Frequently Asked Questions Page 1 of 4
Q. Can the Unemployment Bridge Program pay the mortgage on my investment properties?
A. No. The Unemployment Bridge Program will only pay the first and second mortgage payments for a homeowner’s primary residence.
Q. Can I access the Unemployment Bridge Program without using my personal savings?
A. Homeowners may only retain six (6) months PITI (Principal, Interest, Taxes, and Insurance) in liquid assets (excluding retirement funds). Anything
over that amount may be used toward your mortgage or other debts before you are eligible for UBP.
z Must be unemployed or have experienced a reduction in employment income due to changing economic conditions, through no fault of their own.
z Must have monthly housing debt of more than 31% of the homeowner’s gross monthly income*, or
z Maximum mount of liquid reserves is six (6) months PITI. (excluding retirement funds)**
z The servicer of the loan must be enrolled as a participating servicer. A borrower cannot receive UBP assistance if their servicer has not enrolled
as a participating servicer.
*The combined monthly dollar cost of the mortgage principal, interest, taxes, insurance, and association dues of all secured mortgages must be greater
than 31% of the total household’s gross income after the financial hardship event.
**Homeowners who have unencumbered assets or cash reserves (not including retirement or qualified education plans) that are equal to or more than six
times the total monthly mortgage payment (including tax and insurance payments), must first use those assets toward mortgage payments or other
existing debt before being eligible for UBP funds.
Exclusions
Homeowner cannot have:
z A seller financed mortgage;
**NOTE: Homeowners will be required to sign an affidavit stating s/he has not been convicted of a mortgage-related felony in the last ten years; this
includes larceny, theft, fraud, forgery, money laundering, and/or tax evasion.
z A condominium [unit must be listed on current Federal Housing Administration (FHA), Freddie Mac and Fannie Mae approved list];
z A townhome;
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Frequently Asked Questions Page 2 of 4
z A manufactured or mobile home on a foundation permanently affixed to real estate owned by the homeowners; or
z A two‐, three‐ or four-family dwelling unit of which one unit is occupied by the homeowner as the primary residence.
Exclusions
z The property cannot be abandoned, vacant, or condemned; and
z The homeowner cannot have more than one property other than their primary residence.
z Information about any second mortgage or home equity line of credit, or other liens on the house;
z Information about your checking and/or savings accounts, and other assets; and
z Information about the monthly gross (before tax) income of your household, including recent pay stubs, or documentation of income you receive
from other sources, such as unemployment compensation.
Q. What if I have questions about the application I have already completed or I have questions during the process of completing the
application?
Once you completed the initial information on the UBP Web site or completed the initial intake over the phone, you would have received contact
information for your assigned counselor. If you have additional questions about your application at any stage in the process, you should contact your
assigned counselor directly.
Q. Where can I find additional information about the Kentucky’s Unemployment Bridge Program?
More information on the UBP can be found on the Web site at www.ProtectMyKYHome.org.
Q. Do I have to be in the foreclosure process to speak to a Kentucky Homeownership Protection Center counselor?
A. No. The Kentucky Homeownership Protection Center is a resource for all Kentuckians. If you have questions about budgeting, credit, utility assistance,
home repairs or foreclosure, our staff is here to help you.
Q. Will it cost me anything to work with the Kentucky Homeownership Protection Center?
A. No. All counseling services are free to callers through the Protection Center. Some callers may qualify for free legal advice from Legal Aid. Contact
us now to find out what possibilities are available for your situation.
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Frequently Asked Questions Page 3 of 4
Q. How can I find out who my servicer is and how to contact them?
A. The name of your servicer, their address and phone number should be listed on your monthly mortgage statement or mortgage coupons.
Q. What is foreclosure?
A. Foreclosure is a legal process where a bank or mortgage company can take back a home to satisfy a mortgage debt to them. For a full explanation,
please view the About Foreclosure page.
Q. From the first time I become delinquent on my payment, how long does it take to complete the full foreclosure process?
A. Different types of loans have different time frames. The foreclosure process is also affected by state laws and regulations. Contact us to speak to a
counselor who can advise you in your situation.
Q. What about all the advertisements I see that tell me I can keep my house for a small fee to a private company?
A. There are many unscrupulous people in the world who will take advantage of the panic a homeowner feels when faced with foreclosure. Do not sign
anything or make any agreement without speaking to a reputable counselor first. Contact us to find a counselor in your area.
Q. My loan is currently in foreclosure. I have called to get reinstatement figures and found that there are foreclosure fees and costs due. Why
do I have to pay these fees?
A. Many mortgage agreements specify that if the servicer has to take legal action, any expenses incurred will become the responsibility of the borrower
for reimbursement. This would also include any costs for property preservation and would have to be paid in addition to payments that are due.
Q. I experienced a foreclosure of my home during this past year. When I went to have my taxes done, I have been informed that I am
responsible for additional tax liabilities. Why does this happen?
A. There are tax consequences to any financial situation, such as a foreclosure. Your tax consultant will be able to explain these consequences. For more
information about the effects of foreclosure on your taxes, visit the IRS Web site or contact us to speak to a counselor who can answer many questions.
Q. I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
A. No. Losses from the sale or foreclosure of personal property are not deductible.
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Frequently Asked Questions Page 4 of 4
Q. If I lose my property through foreclosure, will I get any money from the foreclosure sale?
A. Possibly. Before you receive any money, the remaining balance on the mortgage, outstanding property taxes and court fees must be paid first. Usually,
there will be little to no money left for you.
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Resources Page 1 of 2
Resources
Before contacting anyone else, call your loan servicer. If you are behind on payments, ask to speak with someone in loss mitigation. There
are alternatives to foreclosure that may be available to you. Your servicer's name and contact information is listed on the monthly mortgage statement or
coupons you receive to make your payments.
State
Legal Aid Agencies
Complete List of agencies, contact information, and the counties they serve
Better Business Bureau
The Better Business Bureau offers the “Reliability Report” which serves as a business report card. Consumers are encouraged to check the report
before they do business with an unfamiliar company.
http://www.bbb.org
Kentucky Attorney General
The state's Attorney General protects consumers from crimes of all types.
Consumer protection: 1-888-432-9257
Identity theft: 1-800-804-7556
http://ag.ky.gov/
Kentucky Cabinet for Health and Family Services
Food stamps, health care, Medicaid, child care assistance, child support, heating and utility assistance.
http://chfs.ky.gov
Kentucky Department of Financial Institutions
The state's Department of Financial Institutions supervises the financial services industry.
Beginning January 1, 2009, all mortgagees shall provide the "Notification to Homeowners of the Kentucky Homeownership
Protection Center" document to all Kentucky borrowers, as required by KRS 286.2-020. This form is available to download by going to
http://www.kfi.ky.gov/nondepository/khpc.htm
.
Consumers can call to check background and license status of their loan officer, file a complaint or to report fraud.
1-502-573-3390
1-800-223-2579
http://www.kfi.ky.gov
National
U.S. Department of Agriculture-Rural Development Office
1-800-793-8861
www.rurdev.usda.gov
U.S. Department of Housing and Urban Development (HUD)
www.hud.gov
U.S. Department of Veterans Affairs (Veterans Administration)
1-800-827-1000
www.va.gov
Fannie Mae
1-800-7FANNIE (1-800-732-6643)
www.fanniemae.com
Freddie Mac
Information on how to buy a home and avoid foreclosure as well as financial calculators and budgeting tools.
www.freddiemac.com
Calculators and tools: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/
Federal Trade Commission
Consumer protection, information and complaint procedures.
1-877-FTC-HELP (1-877-382-4357)
TTY: 1-866-653-4261
Main site: www.ftc.gov/
Credit repair facts: www.ftc.gov/bcp/conlin/pubs/credit/repair
National Foundation for Credit Counseling
Consumer debt advice
www.nfcc.org.
Annual Credit Reports
www.annualcreditreports.com
Equifax
Credit reports, credit fraud protection and credit dispute information.
www.equifax.com
Experian
Credit reports, credit fraud protection and credit dispute information.
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Resources Page 2 of 2
www.experian.com/
TransUnion
Credit reports, credit fraud protection and credit dispute information.
www.transunion.com
Internal Revenue Service
For Individuals: 1-800-829-1040
For Businesses: 1-800-829-4933
For Hearing Impaired: 1-800-829-4059 (TDD)
Hours of Operation: Monday through Friday, 7 a.m. to 10 p.m. local
time (Alaska & Hawaii follow Pacific Time)
www.irs.gov
Local
Counselors
The Kentucky Homeownership Protection Center works with counseling agencies to provide foreclosure prevention and intervention counseling
services to Kentucky residents. If you are in danger of foreclosure or need budgeting and credit help, contact the Protection Center. A
representative will call you to schedule an appointment with a counselor in your area at no cost to you.
Dial 2-1-1
Some areas of Kentucky have 2-1-1 service which you can call for additional services. Where available, 2-1-1 can help locate the services you
need including food, utilities, medical care, toiletries, household items, furniture and security deposits for rental units.
The Salvation Army
The Salvation Army may have funding available to assist homeowners who are behind on their mortgage payments. Visit the Salvation Army Web
site to find a location near you.
Churches
Contact your church to find out if they have services available. Churches will often assist parishioners in need.
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