Foreclosure action in KY

Our mortgage company (A) was sold to another Mtg company (B) 11/99 but we werent made aware of this until 1/00 when we received the Mtg Interest statemnt for 99 from both companys..We had made Nov & Dec pmts to (A), & have since made pmts to (B) once we found this out..We didnt receive a pmt statmnt in March but I sent pmt in anyway with acct# on ck & a note attached with work#/home# requesting contact if (B) had problem finding acct..When I didnt receive statemnt for April either, I contactd (B)..I found out that day that Ln is in foreclosure for non-pmts since 11/99..I tried getting info on why & how that could happen when we have always sent pmts (via UPS overnite) & was told they had sent back cks via REGULAR MAIL because acct wasnt brought current each month..I explained have never missed any pmts, & confusion could be due to Loan transfer 11/99, but they referrd me to their atty..They ADMITTED never trying to contact us EXCEPT via REGULAR MAIL (have our address incorrect also)..I spoke with their atty, & no help either..Wouldn't tell me anything except we could 'reinstate' Ln but will have to pay atty/court costs also..Wouldn't give me any figures over phone..At time I called, Ln hadn't been sent to Court..Atty still had but refused to hold til I could get all my records/cancelled cks..I explaind to (B) & atty we have never receivd any cks back in mail, or anything showing us dlq..Atty sd we would have to wait til got notice in mail (got today)..That also has wrong address but rural mail carrier knows us, so mail was deliverd..I travel quite a bit & my paycks are direct depositd..We only write cks for Mtg/utility & use debit card..I dont usually balance cking acct since I keep adequate funds in it..My only fault is not making sure these cks were depositd, but I had no reason to question this..My question is, isnt (B) responsible to contact us verbally or via certified mail if a Mtg is delinq?..How can they mail cks back to the consumer via regular mail & not be responsible if we are not made aware of this?..We have every intention of 'fixing this' but will have to pay 'legal fees/court costs' in addition when we werent even aware of this situation until after the fact..How can this happen & are there laws to prevent this from happening again & what will this do to our credit?..Sorry to be so long but this is very upsetting & I dont know what to do or where to turn..(B) said they dont have to contact us verbally or via certified mail, just regular..I explained we have more than 1 road with same name & our address has to be correct otherwise we may not get it..We have gotten other's mail due to same problem, but they wouldnt accept any responsibility on this..I checkd with our Bank & only 2 of the pmts have gone thru, but we dont know where the other cks are..(B) says they sent them back to us, but we didn't get them..Please advise on what we need to do..Thank you..