Our goal is to keep you in your home, foreclosure will only be considered after all other options have been exhausted.

We want you to have the facts about your options. There are several payment alternatives available that you may qualify for that may help you stay in your home.

Foreclosure is the legal process by which a lender takes possession of the mortgaged property when the borrower fails to make monthly payments in a timely way or otherwise violates the loan agreement. We never want to foreclose on a customer’s home. Only when all other options are exhausted will we initiate the foreclosure process. Foreclosure will affect your credit score and possibly your ability to obtain financing in the future.

The action of the lender to refrain from exercising a legal right, especially enforcing the payment of a debt. An example would be a temporary reduction or suspension of payments on a loan, followed by an arrangement to cure the delinquency.

Repayment Plan
This is a type of Forbearance in which an arrangement is reached to repay past due amounts over a period of time in conjunction with regular monthly mortgage payments.

One or more of your existing loan terms may be changed in order to help. This could include: a change in mortgage loan type (such as from an adjustable to a fixed), an extension of the mortgage terms, a step rate, capitalization of delinquent amounts, and/or reduction of your interest rate.

Partial Claims
For FHA Loans only, your lender may be able to work with you to obtain a one-time payment from the FHA Insurance Fund to bring your mortgage current.

Scam artists have stolen millions of dollars from distressed homeowners by promising immediate relief from foreclosure or demanding cash for counseling services when HUD-approved counseling agencies provide the same services for FREE.

If you receive an offer, information or advice that sounds too good to be true, it probably is. Remember, help can be found FREE.

How to Spot a Scam – beware of a company or person who:

  • Asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
  • Guarantees they can stop a foreclosure or have your loan modified.
  • Advises you to stop paying your mortgage company and pay them instead.
  • Pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand.
  • Claims to offer “government-approved” or “official government” loan modifications.
  • Asks you to release personal financial information online or over the phone.

How to Report a Scam – do one of the following:

  • Go to  and fill out the Loan Modifications Scam Prevention Network’s (LMSPN) complaint form online and get more information on how to fight back.
    • Note: you can also fill out this form and send to the fax number/email/address (your choice) on the back of the form.
  • Call (888) 995-HOPE (4673) and tell the counselor you believe you’ve been the victim of a scam or you know someone who has.

Pre-foreclosure or Short Sale
Occurs when a property is listed for sale and proceeds of the sale are accepted in exchange for a release of the lien, even if those proceeds are less than the amount owed.

Deed-In-Lieu of Foreclosure
This option voluntarily transfers the title and possession of the property to the Lender in order to satisfy the mortgage loan debt and avoid foreclosure.

Am I eligible?
Every situation is unique, and will be reviewed carefully to determine if foreclosure is the only possible remedy. Use this list as a general guideline of the information we look at to determine if you qualify for a payment alternative.

  • You must demonstrate an involuntary inability to pay
  • Account in question must be a mortgage or home equity line of credit (no overdraft lines of credit)
  • Home must not be vacant or condemned
  • Property must be a 1 – 4 family dwelling

Credit scores are a concern for most of us.  can help you understand what makes up a credit score, what affects it and what you can do to maintain good credit.
Be advised that as a lender/servicer, we are required to report the current status of your loan. Any missed payments or loss mitigation option will affect your credit.

The U.S. Department of Housing and Urban Development (HUD) has provided an extensive list of HUD-approved credit counseling agencies who can help evaluate your situation and address your needs. They can help you develop a budget, provide recommendations for freeing up cash, and provide housing counseling assistance.

Visit the official HUD.gov page containing tips for avoiding foreclosure as well as summaries of various government programs designed to help lower your monthly mortgage payment, modify or refinance your loan, transition to more affordable housing and more.

KnowYourOptions.com is an official Fannie Mae website filled with helpful information about every phase of home ownership, including detailed advice and resources for avoiding foreclosure, deciding whether to stay in your home or leave it, understanding reverse mortgages, and helpful advice for those who are already in foreclosure.

This site provides step-by-step information on how to become financially literate in order to make informed financial decisions. Learn about credit reports and scores, see the true cost of owning a home, compare the costs of renting vs owning, and get in-depth, easy-to-read home loan product information.

County Resources
Visit your county’s official web page to learn about the financial programs and related resources they may have to offer.

An official program from the Department of the Treasury and HUD, this site is filled with helpful information and valuable programs that can help you avoid foreclosure, lower your monthly mortgage payments, modify a second mortgage or apply for mortgage assistance if you are unemployed.

This site provides information on taxes, grants, housing finance reform, the Recovery Act, the Making Home Affordable program and much more. You’ll also find links to other helpful government bureaus.

Visit the official site of United Way’s 2-1-1 / First Call For Help initiative. This free community service provides confidential information and referrals for help with food, housing, employment, health care, counseling and more. Click to visit the site, or simply call 2-1-1 to get started.

Foreclosure Prevention

Getting ready to buy a home is an exciting time. But with so many important decisions to consider, it can also be a little challenging.

Being prepared can help you stay on track, making your home purchase a more efficient, rewarding experience. For a more detailed home-buying guide, try this helpful step-by-step Home Loan Toolkit created by the Consumer Finance Protection Bureau CFPB and our Ultimate Homebuying Guide. They’re packed with helpful tips and information about the entire home-buying process.

  • Property address of your current home and desired new property
  • Estimated value of your current home and the new property
  • Social Security Number for all borrowers on the loan
  • Income estimates for all borrowers on the loan
  • Loan amount- either the current balance on the loan for a refinance or the loan amount for a purchase.
  • Copy of your photo ID (driver’s license, state ID, passport etc.)
  • Pay stubs for at least the last 30 days. If self-employed, tax returns from the past two years
  • Last two years’ filed tax returns (and all schedules) for all borrowers
  • W2s from the past two years for all borrowers
  • Bank statements for the past two months, all accounts and all pages for all borrowers
  • Any retirement and investment account statements for the past two months
  • If divorced, copy of divorce decree, child support order, alimony
  • A copy of your current mortgage statement
  • Home owners insurance policy information
  • Home equity account information (if applicable)
  • Landlord information and address, for most recent two years (if applicable)

1. Failure to properly disclose all monthly financial obligations
Inform your Mortgage Loan Originator at the time of application of all monthly obligations including mortgage payments, loans, alimony/child support and revolving credit accounts. Additional documentation may be required, which could delay financing.

2. Changes in employment
Changes in employment may affect the underwriting process, especially if there is a job loss, lower salary/wage, or position change. Inform your Mortgage Loan Originator immediately if there is a change or you are considering a change in employment.

3. Change in banks/investments or moving funds to another financial institution
Changing banks or investment institutions, or moving funds between accounts prior to loan closing may result in delays, as deposit re-verification may be required during the underwriting process.

4. Paying off bills/loans prior to loan closing
Paying off existing bills/loans may affect the underwriting of the loan as important debt-to-income ratios may change, requiring re-verification of existing credit reports or loan balances

5. Making a large purchase
A large purchase that involves withdrawing funds from a bank/investment account or the extension of additional credit after a loan application is made may negatively impact loan underwriting or cause delays in processing.

Cindy Hedges, Owner of Bourbon Boot Supply talks about purchasing her own building through Blue Grass Federal. Everybody made the process so much easier.

Bourbon Boot Supply

Bluegrass Hearing Clinic is a loyal customer because they know Sherry Lanter as a person and a customer. They know her needs and it feels like going home.

Bluegrass Hearing Clinic

Lauren and Andrew Biddle went through Blue Grass Federal to build their home. Having the reassurance from Shanda and her team made the process so much easier for them.

Biddle Family – Residential Construction Lending Testimonial

Kimberly Howard, Owner/Operator of Skin NV Aesthetics would like to expand her business into a mobile spa service – she uses Blue Grass Federal mobile banking. Is there a correlation?

Andrea Pompeii, Owner and baker at Hopewell Bake Exchange is a customer of Blue Grass Federal Bank. Knowing that Blue Grass Federal supports her growth goals is important to here and the community connection closely aligns.

Hopewell Bake Exchange

You need to borrow money to pay for your children’s college education. Alternatively, maybe you want to pay down your high-interest credit card debt or add a master bedroom addition to the top floor of your home. One way to do so is to tap into the equity you’ve built up in your home. Building up equity is one of the most important benefits of owning a home. As you pay off your mortgage, you gradually build equity. Simply put, equity is the amount of your home that you actually own. For example, if you have a house worth $200,000 and you owe $150,000 on your mortgage, you have equity of $50,000. You can access that equity in one of two ways, through a home equity loan or a home equity line of credit. Home equity loan A home equity loan is a second mortgage. When you apply for a home equity loan, you’ll receive a single lump sum. You then pay that sum back over a set period of years. The size of your home equity loan will be limited, of course, by the amount of equity you have in your home. The interest rate attached to a home equity loan remains constant throughout the life of the loan. Home equity line of credit Consumers often confuse home equity lines of credit — better known as HELOCs — with home equity loans. However, a HELOC works more like a credit card than a mortgage loan. With a HELOC, you’ll receive a set credit limit. You only pay back the amount of money that you borrow, plus interest. For instance, if you have a HELOC with a credit limit of $50,000 and you borrow $10,000 from it, you’ll only have to pay back that $10,000. You’ll still have $40,000 worth of credit available to you after you’ve borrowed the $10,000. The interest rate on a HELOC is usually tied to the prime rate. Often, the rate will be 1 percent over prime. Which is better? So, which product is better? Not surprisingly, that depends on the individual borrower and the individual situation. Many economists say that a home equity loan is better suited to borrowers who need funds for a specific purchase, such as college tuition or a major kitchen remodel. Since a home equity loan features a fixed interest rate, such a product might be better for those borrowers uncomfortable with uncertainty. A home equity line of credit, though, provides more flexibility. Homeowners do not have to tap into their credit unless they need it. Because of this, many homeowners use a HELOC as an emergency fund, quick cash in the case of an emergency. A HELOC might be the right choice, too, for borrowers taking on a multi-year renovation project. These borrowers can then tap their HELOC whenever they need to write a check to move the project toward completion. The key is to do your research before choosing either a HELOC or home equity loan. Only by studying your spending habits and needs will you be able to make the right equity decision.

Home Equity Loans vs Lines of Credit

Your credit reports are important documents. They list your open credit-card accounts, loan balances and financial missteps. Reviewing these reports on a regular basis is a smart financial decision. After all, the information contained in these reports is the same information that banks and lenders use when determining whether you qualify for loans and at what interest rates. If you’re wondering why your application for a mortgage loan was rejected or why you only qualify for credit cards with sky-high interest rates, the answers might lie in your three credit reports. Fortunately, you can access your credit reports on an annual basis. AnnualCreditReport.com Three credit bureaus compile credit reports on you, TransUnion, Experian and Equifax. The reports kept by each of these credit bureaus might vary, so it’s a smart idea to review all three reports at least once every year. The good news is that under federal law you are entitled to one free copy of each of your three credit reports once a year. You can access these free copies at the Web site, www.annualcreditreport.com. If you want to review your credit reports more than once a year, you’ll have to pay each of the credit bureaus for your extra copies, usually at a price around $9.99 for each report. Reading the report Once you have your credit reports, it’s time to read them. The reports will let you know exactly why lenders consider you either a good or bad lending risk. Each of your credit reports will start out with basic information about you. This basic identifying information will include your name, Social Security number, previous and current addresses, date of birth, phone numbers, employer’s name and spouse’s name. Make sure that this information is correct. Next comes a more critical part of the reports, your credit history. This section of the report lists open lines of credit and loans in your name. If you have a mortgage, it will be listed on the report. So will credit-card accounts, car loans and student loans. This section will also include the amounts of money that you owe, whether to your mortgage lender or your credit-card companies, how much credit is available to you and how well you’ve managed your loans and credit. This last part is important: Your credit report will list whether you often make your payments two weeks late. It will also list whether you’ve missed payments completely. These financial mistakes will lower your three-digit credit score. Again, if you find information in this section of your report that seems incorrect, make sure to make a note of it. Fixing these mistakes with the credit bureaus can boost your credit score. Next comes the public records section of your credit report. Ideally, this part of your report is blank because it lists such negative financial judgments as bankruptcies and foreclosures. These negative judgments can damage your credit score even more severely than will late or missed payments. The final section of the credit report is the inquiries section. This is a list of everyone who has asked to see your credit report. For instance, if you call TransUnion and ask for a copy of your report, it will show up in the inquiries section. If your local credit union asks for your report before agreeing to provide you with a car loan, that inquiry will be in the report, too. Errors It’s important to quickly correct any errors that you discover in your credit reports. Remember, the information on your credit report is used to compile your three-digit credit score. And if this score is low, banks and lenders either won’t lend you money or they’ll do so only while charging you higher interest rates. If you remove errors from your reports — maybe you closed that open credit-card account three years ago or maybe you never did miss that car payment listed as delinquent four months ago — it will have a positive impact on your score. To remove an error, though, you must correct it in writing and send that information directly to the offending credit bureau. You can’t remove errors through e-mail or through a phone call. A credit report might seem like an intimidating document. But once you understand its parts, this report actually provides you with a good roadmap of how lenders and banks see you.

Understanding Your Credit Report

It’s tempting when you pay so many of your bills online to skip on balancing your paper checkbook. After all, balancing the checkbook is no one’s idea of a good time. And with electronic banking now so popular, it’s easy for most consumers to quickly check their balances online. This doesn’t mean, though, that it’s still not important to balance your checkbook on a regular basis. Yes, you can check your balances online if you’re a fan of electronic banking. But what if you’ve forgotten about that $350 car payment and your financing company hasn’t cashed the check yet? You might mistakenly think you have more money in your account than you really have. That can lead to financial disaster: bounced checks and the fees that come with them. Don’t fear, though. Balancing your checkbook isn’t as bad a task as it seems. In fact, with some basic bookkeeping abilities, you can quickly and accurately balance your checkbook to make sure that you never accidentally drain your funds. Be a good record keeper Balancing your checkbook all starts with keeping good records. This means that you must keep track of every time you use your debit card to fill up your gas tank, write a check to your mortgage company or withdraw $20 in spending money from the local ATM. As soon as you return home after making these purchases, writing these checks or withdrawing that cash, write down the amounts you’ve removed from your checking account in your checkbook’s paper ledger. And write down these amounts exactly, down to the last cent. You need to know exactly how much money is in your checkbook if you hope to balance it. Ask for your bank statement Before balancing your checkbook, you’ll need access to your most recent bank statement. This could be simple if your bank offers online checking. Simply log onto your bank’s Web site, type in your user name and password and call up your current account balance. The odds are your bank will list your current balance and your most recent statements. If you don’t have access to electronic banking, you’ll either have to stop in or call your bank to request your most recent bank statement. Your bank might also send you your account statements on a regular basis, usually once a month. You can use that statement, but only if it’s not more than a few days old. If it’s too old, there will be too many transactions that aren’t listed on the statement. What’s cleared? Next, you need to check your checkbook ledger to determine which of your payments haven’t yet cleared. For instance, if you mailed a check to your daughter’s preschool for $500 and the school hasn’t yet cashed it, you’ll need to note this when balancing your checkbook. Your account might have $4,000 in it. But you’ll need to subtract that $500 preschool payment from this balance to have an accurate record of where you stand financially. You’ll need to do the same if you’ve made deposits to your checking account that haven’t yet cleared. For instance, a client may have sent you $500 through PayPal. Deposits made through PayPal usually take up to three business days to actually get into your checking account. When balancing your checkbook, make sure to account for these deposits, too. Remember, you don’t have to be an accountant to balance your checkbook. You just need to be willing to take a small amount of time on a regular basis — once a week or once a month, perhaps — to track what you’ve spent and what you’ve earned.

Balancing a Checking Account