FRANKFORT —
FRANKFORT There are about 20,000 foreclosures in Kentucky each year; nearly one in four mortgaged properties is “upside down,” with a lower property value than the mortgage debt; and one in 10 owners of mortgaged property is 30 days or more behind in his payment.
Yet Kentucky has fared better than the nation and most of the surrounding states. According to the RealtyTrac website, on average there is one foreclosure for every 2,826 households in Kentucky compared with one in 686 nationally.
That was some of the data presented Monday to a state House task force looking at the foreclosure “crisis” in Kentucky, a task force that isn’t entirely sure what it can do to address the problem.
According to Ben Carter, an attorney who works with the non-profit Network Center for Community Change in Jefferson County, there are alternatives to foreclosure which are less expensive for both the lender and the borrower and benefit neighbors and the community.
Carter said there are about 20,000 foreclosures each year in Kentucky, about half of those in Jefferson County. On average, he said, those cost the lending institutions about $50,000 each. But a relatively simple loan-modification process might save the lenders lost money and keep homeowners in those homes.
Yet many homeowners facing foreclosure don’t understand their options.
“Some owners get foreclosure notices and think they’ve been evicted and just leave their homes,” Carter told the task force.
That causes problems for everyone. Lenders must go through a judicial foreclosure process, one in which they incur legal costs and often repair and maintenance costs on abandoned property. Usually, it takes at least six months to get the property back on the market – after the foreclosure is complete and that process sometimes takes as long as two years.
Carter said neighbors suffer on average a 1 to 2 percent drop in their own property values when a home in their neighborhood is foreclosed on or abandoned. That costs state and local government property tax revenues and local school districts revenue, too.
J.D. Chaney, Director of Legal Services for the Kentucky League of Cities, says there are other costs. Homeowners often abandon foreclosed properties that then are vandalized and become eyesores and environmental threats. Local governments sometimes must pay for boarding up the properties and keeping lawns mowed.
Such homes are sometimes stripped of copper lighting and plumbing fixtures, either by the departing owner or tenant or by vandals. Some become sites of criminal activity, including drug trafficking.
In some cases, according to task force member Rep. Kevin Sinnette, D-Ashland, who is a former assistant city attorney, even some out-of-state banks walk away from such properties. Sinnette said it’s difficult in many cases for the local jurisdiction to identify the mortgage holder.
It’s not a problem with local, community banks, Sinnette said, but mortgages are often sold to other lenders in the form of securities and in such cases it’s almost impossible to determine actual ownership.
Rep. Arnold Simpson, D-Covington, wondered aloud what lawmakers can do because mortgages are contracts.
“Can legislators force these loan modifications?” Simpson asked Carter. He asked if Carter was asking the legislature “to impair the right of contract?”
Carter said instead the legislature could work with the judicial branch to make sure homeowners understand their options and provide education. He suggested foreclosure notices be required to include information about those.
Rep. Jesse Crenshaw, D-Lexington and an attorney, said foreclosure isn’t his specialty but that he handled one case for an acquaintance who worked out a loan modification with his lender and remained in his home making payments.
But Crenshaw said when he appeared in court on that case, “in one court, on one Friday, on one docket” a judge approved 22 foreclosure notices in rapid succession, primarily because there was no one to defend the homeowners.
Task Force Chair Rep. Joni Jenkins, D-Shively, said the group will invite other interested parties to meet with the lawmakers and will offer recommendations on the issue to the 2013 General Assembly, which convenes next January.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/
cnhifrankfort.
Local News
Foreclosures in state number 20,000 annually
- Local News
-
-
Board eyes cost-cutting options
In a special-called work session Tuesday, the Madison County School Board looked at ways of reducing a projected $2.84 million draw from its reserves to fund the 2013-14 budget.
-
‘Berea’s Unsung Heroes’
A group of Bereans were honored Tuesday night at the Berea Community School Board, many of which had never been in the spotlight before.
-
Berea relaxes yard sale ordinance, may restrict fireworks
The Berea City Council adopted a new yard sale ordinance Tuesday, but only after it was amended twice.
-
Items stolen, but no one injured in home invasion
Berea police are looking for a man who broke into a First Street home Monday and threatened a resident with a knife.
-
Madison County veterans to host Memorial Day ceremonies
The Madison County Veterans Association, which includes a number of local veterans’ organizations, will be hosting two Memorial Day ceremonies Monday.
The first will take place at the Richmond Cemetery near the flagpole at 10 a.m., and the second will follow at noon in Madison County Memorial Gardens on Berea Road.
Everett King of the American Legion, which is coordinating this year’s events, said U.S. Rep. Andy Barr, R-Sixth District, will be present at the morning ceremony.
Every year the Memorial Day event has a theme. Last year’s theme was honoring Vietnam veterans, King said, while this year’s theme is honoring all American soldiers. -
Another arrest made in rash of business burglaries
Another local man has been arrested in connection with a “smash-and-grab” business burglary in April.
-
Memorial Day 5K to benefit Hospice Care Plus
For the second year, Chick-fil-A is donating the proceeds from its Spicy Memorial Day 5K race to Hospice Care Plus.
-
Donations to national charities is best way to help disaster victims
The best way to help with relief efforts associated with the recent tornadoes in Oklahoma is to contact national organizations such as the American Red Cross and The Salvation Army, according to a statement from the Madison County Emergency Management Agency.
-
Storm topples towering motel sign
No one was injured late Tuesday afternoon when a brief but severe storm blew a Red Roof Inn sign from its base and sent it crashing into a pickup truck parked at the motel. Strong thunderstorms are expected today.
-
Craft lovers fill Kirksville Community Center
The Kirksville Community Center was packed with artists and craft lovers Saturday for the Spring Gathering craft/vendor fair.
Many talented local and regional crafters were set up for the event.
One of the youngest was Laisha Gaines, a 10-year-old from Georgetown, who was selling homemade crafts with her grandmother, Jayne Gaines of Paris. Gaines said she started crafting with Laisha when she was only 3.
Laisha has now taken up most of her grandmother's stand with her creations, from wooden owls to beaded jewelry to small quilted items that are quirky and cute. - More Local News Headlines
-
Board eyes cost-cutting options
Obama Offers Drone Strike Defense
Raw: Heckler Interrupts Obama on Guantanamo
A Slice of Apple History Up for Grabs
Johnson: Don't Blame Islam or UK Policy
Raw: 80-Year-Old Climbs Mount Everest
Wash. State Man Arrested Following Ricin Scare
Chain-Reaction School Bus Crash Injures About 50
Raw: Scuffles in London After Hacking Death
Texas Students Coach Teachers on Fitness
New Forecasting Tool Eyed for Hurricane Season
Meet MJ, the Bike Riding Tabby Cat
Britain Attack Believed Linked to Radical Islam
Raw: Kevin Durant Tours Moore After $1M Pledge
Man Shot While Questioned in Boston Probe
Weiner Launches Bid to Become NYC Mayor
School Storm Protection Spotty in Tornado Zones
Moore Native Toby Keith Tours Tornado Damage
