Alabama Foreclosure Process and Laws

 


Quick Facts About the Alabama Foreclosure Process

Judicial Foreclosure Available: Yes

Non-Judicial Foreclosure Available: Yes

Primary Security Instruments: Deed of Trust, Mortgage

Timeline: Varies by Process; Typically 30 – 60 days

Right of Redemption: 12 months

Deficiency Judgments Allowed: Yes

A mortgagee may foreclose on mortgages or deed of trust in Alabama through a judicial or non-judicial foreclosure process.

Judicial foreclosure
When no power of sale is present in the deed of trust or mortgage, the judicial foreclosure entails filing of a lawsuit to get a court order to foreclose. Another option is by choosing to forego the lawsuit by directly selling the property. This is stated in the “No Power of Sale Foreclosure Guidelines.”

Non-Judicial Foreclosure
When the power of sale is present in a mortgage deal, the non-judicial process of foreclosure is used. The power of sale means that the borrower allows the sale of the mortgaged property to pay off any existing balance in case of their default. Because of this, the lender or his representative has the power to sell the property. Regulations in this process are stated in the “Power of Sale Foreclosure Guidelines.”

Power of Sale Foreclosure Guidelines
If a mortgage contains a power of sale clause which specifies the time, place and terms of sale, then this must be followed. If not, the foreclosure sale may take place on the front door of the courthouse in the county where the property is located. This can be done after default of the deed of trust and sold for cash to the highest bidder. But the sale can only be done 30 days after the last notice of the sale is published.

A notice of the sale must be published in a newspaper once a week for four consecutive weeks in the county or counties where the property is located. The notice must contain the time, place, terms of sale as well as a description of the property. If the is no newspaper available in the county where the property is located, then it must be published in the next nearest county.

No Power of Sale Foreclosure Guidelines
If there is no power of sale in the mortgage, the lender may file a lawsuit to foreclose, or sell the property to the highest bidder in front of the courthouse of the county where the property is located. But a sale can only take place after a notice has been published in the newspaper of the county where the property is located for four consecutive weeks, which states the time, place and terms of the sale.

Foreclosure Avoidance Counseling

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

CINDY YARBROUGH
Field Office Director

Birmingham Field Office
950 22nd St North
Suite. 900
Birmingham, AL 35203-5302

Tel: (205) 731-2617
Fax (205) 731-2593
Email: AL_Webmanager@hud.gov