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. You can also find federal and state programs here: Alabama Foreclosure Assistance Programs
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 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 instead 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 medical expenses because of an illness, get copies of your medical bills for the last year.
Forbearance Agreement
Contact your lender if you cannot pay in full. Some lenders have forbearance programs that allow you to halt payments and stop the foreclosure temporarily. Other lenders will make payment arrangements with you to make up the missed payments, but the lender can request a partial refund 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 debts can be added to the new payment schedule so you can pay the bank balance over time.
Short Sale
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 make 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 the state of Alabama, some lenders may foreclose on deeds of trusts or mortgages that are in default using either a non-judicial or judicial foreclosure process.
Have a specific question about Avoiding Foreclosure in Alabama? Check out our Foreclosure FAQ’s section.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit to get a court order to foreclose, is used when no power of sale is within the mortgage or deed of trust. But if no power of sale remains present, creditors can, at their own option, choose to forego a suit and foreclose by selling the house, as summarized below at the”No Power of Sale Foreclosure Guidelines.”
Non-Judicial Foreclosure
If the deed of trust or mortgage includes a power of sale clause and specifies the time, location, and conditions of sale, then the specified procedure should be followed carefully. But if the deed of trust or mortgage includes a power of sale clause, but doesn’t define the time, location and conditions of sale, then a foreclosure sale might occur in the front or principal door of the courthouse of the county in which the land situated, following the default of this deed of trust or mortgage, for cash to the maximum bidder. The sale might not occur until thirty (30) days after the previous note of sale is printed. Said letter of purchase has to be provided by publication once weekly for four (4) consecutive weeks in a paper published in the county or counties where the land is situated. In the event the house is under mortgage more than one county, the book will be made in most counties where it’s found. The notice of sale has to give the time, place, and conditions of said sale, together with a description of their property. If no paper is printed in the county in which the lands are situated, the note shall be put in a newspaper published in an adjacent county for four (4) consecutive 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 the 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. The said sale may not take place until after notice of the time, place, terms and purpose of the transaction has been published for four (4) consecutive weeks in a newspaper published in the county wherein said lands or a portion thereof are situated.