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Category Archives: Kentucky Law

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Is eRecording Secure? Recognizing the Risks, Deflating the Myths

Posted in Collateral, Kentucky Law
When it comes to the electronic recording and notarization of documents, Kentucky has historically been on the outside looking in, while neighboring states have embraced the efficiency and cost-saving benefits of eRecording. But that may soon change: Kentucky is on the verge of passing legislation that would adopt the key provisions of the Uniform Real… Continue Reading

Kentucky To Consider E-Recording Reforms

Posted in Collateral, Kentucky Law
The past two decades have seen a paradigm shift in the way states sign, record, and notarize documents. Once hindered by paper document and “wet” signature requirements, the modern recordation process in many states has evolved to allow recording of real estate records electronically. States first began adopting laws to equate “e-signatures” with pen-and-paper signatures… Continue Reading

SCOKY Drops the Ball in Unifund

Posted in FDCPA, Kentucky Law, Usury
The Kentucky Supreme Court offered a new interpretation of Kentucky’s usury statute, KRS 360.010, in a collection case involving a credit-card receivable. Unfortunately, SCOKY interpreted a statute that did not apply. Harrell, a consumer, had a credit card agreement with Citibank, N.A., a national bank with headquarters in South Dakota. The interest rate was 27.24%.… Continue Reading

Comer Introduces Industrial Hemp Bill

Posted in Healthcare, Kentucky Law, New Rule
Kentucky Representative (and former agriculture commissioner) James Comer introduced new legislation (H.R. 3530) to reduce the burden of regulations and statutes applicable to industrial hemp, an industry which is growing by leaps and bounds in Kentucky. Currently, the statute allows “pilot projects” and “research,” but the industry needs more clarity and certainty to encourage investment… Continue Reading

New York and Florida Courts Enforce E-Notes

Posted in CFPB, Foreclosure, Kentucky Law, Note Sales
Appellate courts in New York and Florida recently ruled that mortgage lenders “holding” electronic notes had standing to foreclose on the real property securing the E-Notes. Although Congress passed the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000, and nearly all states have passed the Uniform Electronic Transactions Act (UETA) in the… Continue Reading

Into The Void: Kentucky Adopts Uniform Fraudulent … er, I Mean … Voidable Transactions Act

Posted in Fraudulent Transfer, Kentucky Law
Until 2016, Kentucky was one of just a few states that had not adopted a model statute relating to fraudulent transfers.  As mentioned in a prior post on Kentucky’s statutory quirkiness, its statute descended neither from the Uniform Fraudulent Transfer Act (“UFTA”) nor the Uniform Fraudulent Conveyance Act (“UFCA”).  Effective this year, however, Kentucky is at the leading edge… Continue Reading

Kentucky Legislative Tweaks

Posted in Kentucky Law
With only one day left in the 2016 legislative session—the legislature is scheduled to adjourn sine die on April 12—the General Assembly has passed, and the Governor signed, less than 30 of the 941 bills introduced—a success rate of only 3%.  Most of the remaining time will be spent in budget negotiations, and the Governor… Continue Reading

Statute of Frauds Prevents Borrower From Modifying Modification Agreement Orally

Posted in Forbearance, Foreclosure, Kentucky Law, mortgage
In Parker v. Kentucky Housing Corporation, the Kentucky Court of Appeals affirmed an order of sale in a foreclosure action.  Mrs. Parker first defaulted on her obligations in 2001 and again in 2004.  Kentucky Housing Corporation modified her loan in March 2005 by reducing the interest rate for two years.  DMM, as agent for KGC,… Continue Reading

Your Guaranty Might Be Invalid In Kentucky

Posted in Guaranty, Kentucky Law
As I’ve mentioned before, Kentucky law is quirky in many respects.  Unlike most states, Kentucky’s fraudulent transfer statute is essentially bespoke, adopting neither the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act.  Kentucky’s Constitution requires that lawyers swear an oath that they’ve never participated in (or seconded) a duel.  Kentucky’s Constitution also adopts wholesale the… Continue Reading

SCOKY Reverses ‘Secret Lien’ Holding!

Posted in Article 9, Kentucky Law
Worried about secret liens trumping your perfection? Imagine funding a loan under the assumption that you had a first-priority security interest in a debtor’s assets to only have the government assert a secret lien over your collateral. The Kentucky Supreme Court, like courts in other states, recently recognized that the UCC Article 9 governmental entity… Continue Reading

Welcome to the Neighborhood — Kentucky High Court to Determine Whether Lender is Obligated to Pay HOA Dues on Unimproved Property

Posted in Collateral, Kentucky Law, Owned Real Estate, Workouts
The Supreme Court of Kentucky has granted discretionary review of a court of appeals ruling that a bank taking 51 subdivision lots by deed in lieu of foreclosure was not entitled to the developer’s exemption for homeowners association (HOA) dues. In Woodlawn Springs Homeowners Assoc., Inc. v. Your Community Bank, Inc., the lower court had… Continue Reading

Kentucky Court of Appeals: Seniors Rule!

Posted in Foreclosure, Kentucky Law
The Kentucky Court of Appeals ruled last week that a junior mortgagee may not force a judicial sale free and clear of a senior mortagee’s interest even when the senior mortgagee defaults in the underlying foreclosure litigation. In Mortgage Electronic Registration Systems v. Mainsource Bank, No. 2012-CA-001168 (Feb. 21, 2014), the junior lienholder had instituted a foreclosure… Continue Reading

The Two Most Important Kentucky Business Foreclosure Decisions…

Posted in Counterclaim, Forbearance, Kentucky Law, Receivership
…arise out of the same case.  The cases are Thompson v. BB&T, 2008-CA-1217 (Ky. Ct. App., June 12, 2009) (“Thompson I“) and Thompson v. BB&T, 2009-CA-1427 (Ky. Ct. App., Jan. 28, 2011) (“Thompson II“). Both decisions arise out of a commercial lending dispute that boiled over into a foreclosure in which the borrower asserted sizeable… Continue Reading

Enforcing Troubled Business Debt In Kentucky

Posted in Foreclosure, Kentucky Law, Receivership
That troubled business credit in Kentucky is slowly but surely winding its way through your workout roadmap.  Despite your generous extension, efforts to broker a refinancing have failed.  Your borrower stops making payments.  Your borrower resists discussing a friendly liquidation.  Pretty soon, your borrower stops returning your calls altogether.  You reach out to counsel.  What… Continue Reading