Update: On March 18, 2020, Governor Laura Kelly signed Executive Order #20-06, which temporarily stops foreclosures in Kansas due to the coronavirus (COVID-19) outbreak. The order prohibits financial institutions from initiating foreclosure efforts or judicial proceedings. It also halts residential or commercial eviction efforts or judicial proceedings until May 1. The order is in effect until rescinded, May 1, 2020, or until the statewide State of Disaster Emergency proclaimed on March 12, 2020, relating to COVID-19 expires, whichever is earlier.
If you’re facing a foreclosure in Kansas, the process will start when the bank files a foreclosure lawsuit in court. But before doing so, the lender must typically wait for a 120-day federal preforeclosure review period to expire. The waiting period allows homeowners the opportunity to bring the loan current or find another way to avoid losing the home. After the period elapses, the lender can begin the foreclosure under state law.
In this article, you’ll learn more about the Kansas foreclosure process, as well as about rights that might help you retain your home.
Federal Preforeclosure Review Period
If you stop making your mortgage payments, the loan servicer (on behalf of the lender or current loan owner) can sell your home through a process called foreclosure. The foreclosure will proceed according to the laws in your state, but before this can happen the lender or servicer must usually wait until you're more than 120 days delinquent on the loan.
The 120-day waiting period gives the homeowner time to submit a loss mitigation application to the lender. "Loss mitigation" is a term that lenders use to describe alternatives to foreclosure, like a loan modification, repayment plan, forbearance agreement, short sale, or deed in lieu of foreclosure.
If the 120-day waiting period expires before you request loss mitigation from the lender, the foreclosure process can officially begin. Also, the foreclosure is put on hold until the servicer evaluates the paperwork anytime that you complete a loss mitigation application before the foreclosure starts. (Find out more about the federal preforeclosure review period in When Will Foreclosure Start?)
Kansas Foreclosure Procedures and Homeowner Rights
Kansas foreclosures move through a judicial court process. The lender files a lawsuit with the court and serves a copy on the homeowner. If the owner fails to answer the suit, the bank will automatically win the case and the court will give the foreclosing party permission to sell the home and use the proceeds to pay off the mortgage debt.
If the borrower files an answer to the lawsuit and asks the court to consider a defense to the suit, the suit will go through litigation. The court will decide the case after hearing a summary judgment motion (a legal motion filed by the lender asking the court to find that no genuine issue of material fact exists and that it’s entitled to judgment as a matter of law) or following a trial. If the court finds that the foreclosure should proceed, it will enter a judgment against the homeowner. The lender will have the right to sell the home at a foreclosure sale.
Reinstating a Kansas Mortgage
Kansas doesn’t explicitly provide homeowners with the right to stop the foreclosure by reinstating the mortgage. But many Kansas mortgage contracts give the borrower the right to reinstate the loan until a specific deadline, such as when the court enters a judgment. If your contract doesn’t provide a right to reinstate, your lender might allow reinstatement if you offer to do so before the sale takes place.
Redeeming the Home After the Sale
In Kansas, a homeowner can get the property back by “redeeming” it, or repaying the new purchaser the full amount paid at the sale, plus other costs, such as interest. Here’s how it works:
- 12-month redemption period. In Kansas, the homeowner can redeem within 12 months if more than one-third of the original mortgage indebtedness was paid off before the foreclosure.
- 3-month redemption period. The redemption period is reduced to three months if you paid less than one-third of the initial loan amount. However, an exception exists: If the court finds that you involuntarily lost your job following the foreclosure sale (but before the three-month period expires), the court can extend your time to redeem for another three months.
- Redemption period based on total mortgage debt. In cases where the homeowner has paid less than one-third of the mortgage loan, but all mortgages on the property add up to less than one-third of the market value of the home, the redemption period is 12 months.
- Redemption period if you abandon the home. If a court determines that you abandoned (permanently moved out of) the home, it can further shorten these time frames or eliminate the redemption period altogether.
- Waiving the redemption period (only allowed under specific circumstances). Except for mortgages covering agricultural lands or mortgages covering single or two-family dwellings owned by or held in trust for natural persons owning or holding such dwelling as their residence, if the terms of the mortgage include a waiver, there is no redemption period. (The mortgage may also provide for a shortened redemption period.)
(To learn the redemption period in your situation, talk to a local foreclosure lawyer.)
Deficiency Judgments in Kansas Foreclosures
A “deficiency” is the difference between the foreclosure sale price and the total mortgage debt. In Kansas, the lender can get a judgment for this amount (a deficiency judgment) against you subject to some restrictions, which are discussed below. After the lender obtains a deficiency judgment, it can use general collection methods—for example, by removing money from your bank account (bank levy) or your paycheck (wage garnishment)—to collect the amount you still owe. If you’re facing a deficiency, you might want to consider filing for bankruptcy to wipe it out (along with other qualifying debt).
Under Kansas law, if the court decides that the foreclosure sale price was too low, it can refuse to confirm the sale and order a resale with a minimum price or allow the foreclosing party to increase the bid to the amount established by the court. The court helps the foreclosed owner by doing so because it reduces the amount of the deficiency.
Also, if the bank served the borrower by publishing a notice of the foreclosure action (rather than personally serving the homeowner with a copy of the lawsuit), then there’s another hitch. The court won’t award the lender a deficiency judgment unless the borrower enters an appearance (participates) in the foreclosure action (such as by filing an answer, for example, or showing up in court).
How to Look Up Kansas Foreclosure Laws
You can find Kansas’ foreclosure laws in the Kansas Statutes (sections 60-2410, 60-2414, and 60-2415). Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consult with an attorney if you’re facing a foreclosure.
Questions for Your Attorney
- How long will the foreclosure take?
- What are my options other than foreclosure?
- How long do I have before I have to leave my foreclosed home?
