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» FROM THE BENCH Sellin' Ellen My emphases on marketing selling closing properties in record time and numbers Serving: Johnson, Wyandotte, Leavenworth, Miami, Jackson, Clay & Cass Counties Sells and closes majority of REO properties in same month. Inventory is handed in an effective timely maner. Awards: Top Gun Silver Award, Realty Executives International 2012, Ranked #2 Realty Executives Mid -America Region 2012, Ranked #20 Kansas City Business Journal 2012 Specializing in: REO, Short Sale, REO to Rental, Property Management, Hedge Funds Your Greater Kansas City REO expert Marketed REO Properties Certified ShortSale Expert REO Rental and Property Management. Ellen S. Brewood Realty Executives of KC 11401 Ash, Leawood, KS 66209 eb-kcreo@sbcglobal.net 913-221-3348 cell 913-962-4100 ext. 103 office 913-962-4140 fax www.kcreosales.com NAWRB WWW.NAWRB.COM ESTABLISHED 2009 Look Before You Leap: Delaying Foreclosure Sales in Kansas Has Costly Consequences Due to increasing pressures from the Consumer Financial Protection Bureau and the National Mortgage Settlement, default servicers are faced with the dilemma of choosing whether to proceed with a foreclosure sale or to pursue further loss mitigation efforts. The tension of interests between efficiently completing the foreclosure sale and exhausting loss mitigation alternatives is especially prevalent in judicial foreclosure states, including the state of Kansas. In an effort to provide one last effort for homeowners in default to keep their homes, even after setting a sale date, many servicers choose to delay the sale in order to allow more time for the borrower to submit a completed application for a loan workout. This method is based on a faulty assumption, however, that Kansas law allows a foreclosure sale to be postponed, or cancelled repeatedly. Unlike in Missouri, Kansas law contains no provisions allowing a servicer to postpone a foreclosure sale once the sale date has been set. Rather, if a servicer has made the decision to delay the foreclosure sale for any reason, the sale must be cancelled and then reset. The notice of sale must once again be published, and a new order of sale must be obtained from the court. Many counties in Kansas require a motion and order to cancel a pending foreclosure sale. Further difficulty arises in counties that will not allow multiple cancellations of sales. Douglas County (Lawrence, Kansas) Administrative Order No. 12-09, made effective March 14, 2012, prohibits multiple cancellations except in "extraordinary circumstances and upon good cause being shown." The court does not consider additional loss mitigation review to be good cause. Other counties have gradually started to take this position and will limit the number of times a foreclosing plaintiff may cancel and reset a foreclosure sale, although these other counties have yet to codify their respective rules. There are several unintended consequences servicers may face by cancelling and resetting foreclosure sales. Repeated actions of this nature may alienate the courts, and VISIT US ONLINE @ DSNEWS.COM they are costly to servicers. Not only must the plaintiff pay an additional fee each time a new publication is initiated, but if the property lies in one of the counties where multiple cancellations are not allowed, the servicer must also dismiss and re-file the foreclosure action at its own costs. Default servicers are well-advised to carefully consider whether they are prepared to move forward with the sale prior to seeking a sale date. If a sale absolutely must be cancelled, then servicers must remember that in Kansas, a foreclosure sale cannot be postponed; therefore, the servicer should determine whether a new sale date should immediately be requested if only a short delay is needed. Alternatively, if a significant amount of time will be needed to review the borrower for loss mitigation, then the servicer should place its file on hold and instruct its foreclosure counsel to do the same. Communication between the servicer and foreclosure counsel is, as in most circumstances, essential to reducing costs to the bank and to fostering good will among the courts. This "From the Bench" article was contributed by Megan R. Cello, associate attorney in the judicial foreclosure department in the Overland Park, Kansas, office of South & Associates, P.C. Kentucky rank: 29 90+ Day Delinquency Rate 2.2% Foreclosure Rate May 2013 Unemployment Rate 2.2% 8.1% year ago 2.4% 3.4% 8.3% year-over-year change -10.2% -32.9% -2.4% Top County Harlan CounTy 90+ Day Delinquency Rate May 2013 4.8% Foreclosure Rate 6.8% year ago 4.6% 6.7% year-over-year change 4.3% 2.1% Top Core-Based Statistical area MounT STerling, Ky 90+ Day Foreclosure Delinquency Rate Rate May 2013 2.3% 5.1% year ago 3.2% 6.3% year-over-year change -28.4% -19.6% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the May 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary May 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. 81