Facing Foreclosure In Alabama?
The first step to saving your home is understanding the foreclosure laws in Alabama. There may be specific rules that help protect your rights as a homeowner.
How To Prevent Foreclosure In Alabama?
Before getting into the fun legal stuff you should familiarize yourself with options that may help you avoid foreclosure.
Call Your Mortgage Lender
It sounds simple but the first thing you should do is contact your lender if you are struggling with mortgage payments. You can find your lender contact information on your monthly mortgage statement or on their website. Most lenders have a designated helpline available for homeowners in distress.
Foreclosure Defense Attorney
Reaching out to an attorney can be intimidating, but this is your house and you need to act fast. A foreclosure attorney may help you navigate the foreclosure laws in Alabama. You can call the Nationwide Foreclosure Helpline at 1-888-724-3118.
Deed In Lieu Of Foreclosure
Gather proof of the need for a deed in lieu. Document the hardship that prevents you from paying your loan. For example, if you’ve got medial expenses because of an illness, get copies of your medical bills for the last year.
Contact your lender if you cannot pay in full. Some lenders have forbearance programs that allow you to temporarily halt payments and stop the foreclosure. Other lenders will make payment arrangements with you to make up the missed payments, but the lender can request a partial payment for this agreement. Ask the bank representative about all options available to you and request that all forms be mailed to your home.
Request A Loan Modification
Ask the lender for a loan modification. The lender may modify the terms of your loan to make the payments more affordable by lowering your interest rate or lengthening the duration of the loan. The owed payments can be added into the new payment schedule so you can pay the back balance over time.
A short sale is when you sell the home for less than what is owed on your mortgage, allowing you to avoid a foreclosure. The lender will often cancel the remaining mortgage debt after your home is sold. You’ll have to enlist the services of a real estate agent and attorney to do a short sale, and you’ll also have to find a buyer.
Alabama Foreclosure Laws
– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: Yes
– Primary Security Instruments: Deed of Trust, Mortgage
– Timeline: Varies by Process; Typically 30 to 60 days
– Right of Redemption: 12 months
– Deficiency Judgments Allowed: Yes
In Alabama, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Have a specific question about Avoiding Foreclosure in Alabama? Check out our Foreclosure FAQ’s section.
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. However, when no power of sale is present, lenders may, at their option, choose to forego a lawsuit and foreclose by selling the property, as outlined below in the “No Power of Sale Foreclosure Guidelines”.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of the property to pay off the balance on a loan in the event of their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”. Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, if the deed of trust or mortgage contains a power of sale clause, but does not specify the time, place and terms of sale, then a foreclosure sale may take place at the front or main door of the courthouse of the county where the property located, after default of the deed of trust or mortgage, for cash to the highest bidder. The sale may not take place until thirty (30) days after the last notice of sale is published. Said notice of sale must be given by publication once a week for four (4) successive weeks in a newspaper published in the county or counties in which the property is located. If the property is under mortgage in more than one county, the publication is to be made in all counties where it is located. The notice of sale must give the time, place and terms of said sale, together with a description of the property. If no newspaper is published in the county where the lands are located, the notice shall be placed in a newspaper published in an adjoining county for four (4) successive weeks. No Power of Sale Foreclosure Guidelines
If no power of sale is contained in a mortgage or deed of trust, the lender, or any assignee thereof, may, after default of the mortgage or deed of trust, either file a lawsuit to foreclose or foreclose by selling the property to the highest bidder for cash at the
courthouse door of the county where the property is situated. Said sale may not take place until after notice of the time, place, terms and purpose of the sale has been published for four (4) consecutive weeks in a newspaper published in the county wherein said lands or a portion thereof are situated.