Kansas Foreclosure Prevention Efforts
For 2009, Kansas ranked 36th among all states in foreclosure rate, an increase of 45.64% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.
All foreclosures in Kansas are judicial. When a homeowner is more than 30 days late with a mortgage payment, a lender sends a Notice of Complaint to the borrower and seeks an order of foreclosure from the court. If the homeowner can not be found, Kansas law allows for service by publication. A borrower has 20 days to answer. When the lender obtains a court judgment, the borrower has 10 days to pay before a foreclosure auction can be scheduled.
The notice of the time and place of the sale must be published in a local paper once a week for three weeks with the last publication between 7-14 days before the sale date. Notice of the foreclosure auction must also be sent to the borrower the within 4 days of the first day of publication. Foreclosure auctions are scheduled at the local courthouse. The borrower has 12 months to redeem the property by paying the amount of the loan, interest and costs. Deficiency judgments are allowed in Kansas.
In July 2009, Kansas Attorney General Steve Six announced that he was joining a national crackdown on bogus foreclosure rescue operations, with the Federal Trade Commission, the U.S. Department of Justice, other state attorneys general and local district attorneys called “Operation Loan Lies.”
In November 2008, Kansas, along with ten other states, reached a settlement with the Bank of America that resolved allegations against Countrywide Financial Corporation the largest servicer of sub prime loans in the United States. Countrywide, now part of the B of A, was accused of using “unconscionable and deceptive acts and practices in making and servicing home loans.” The agreement was expected to provide $16 million to lower mortgage payments for more than 1000 Kansas homeowners.
In addition, Bank of America and Countrywide will pay $150 million in foreclosure relief in payments to borrowers within the 11 states, who have already lost their home due to predatory lending. Homeowners who received a letter indicating they are eligible should contact the Kansas Attorney General’s office with any questions toll free at 1-(800) 432-2310 .
The Kansas Attorney General’s Office warns distressed borrower to beware of mortgage modification scammers who try to take advantage of homeowners behind on their mortgages. Homeowners should be particularly wary of anybody who charges a large upfront fee for help. The AG warns that many of these companies hide behind official sounding names. Modifications can usually be done by the homeowners themselves or at little or no cost through these US Housing and Urban Development (HUD) approved counseling agencies.
Housing and Credit Counseling of Topeka offers this downloadable guide to foreclosure prevention options for distressed borrowers.
The Office of the State Bank Commissioner offers several free guides of note to homeowners trying to refinance to a more affordable mortgage, including handbooks on adjustable rate mortgages, home equity loans, looking for the best mortgage, and credit repair. They can be ordered here.
