Alabama Foreclosure Law

Alabama Foreclosure law states the rules that govern how a lender can foreclose. Below here is a summarized Alabama’s foreclosure law in support of the easy understanding of forecloses process in Alabama State that will help one to avoid procedural drawbacks.

Alabama foreclosures take place both in courtyard and out-of-court. In Alabama state foreclosure process period takes 49 to 74 days and 21 days for sale publications. Alabama foreclosure law gives backing to deed of trust and mortgage as primary security instruments. Alabama foreclosure law permit statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs within 365 days after the sale.
Recent statistics shows that in Alabama state currently has 2308 foreclosure properties one in every 925 housing units.

Lender in Alabama State may foreclose on deeds of trusts or mortgages in case of default using either a non-judicial or judicial foreclosure procedure.

Primarily non-judicial foreclosure has rich follow-out in Alabama State. Non judicial foreclosure process is used when a “power of sale clause “exists in a mortgage or deed of trust, which upon default allows an attorney to foreclose on the property in order to satisfy the underlying defaulted loan. “Power of sale clause” empowers lender to sell the property may be executed by the lender or their representative.

After the default proceedings may take place in two ways condition mortgage or deed of trust contains “Power of sale clause” if power of sale clause specifies the time, place and terms of sale, then the specified procedure must be followed, however if it 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. Notice of sale must be given by publication at least 21 days before the sale. The notice of sale must provide the time, place and terms of sale and with details of property.

The borrower stop the foreclosure process by making payment prior to the foreclosure sale along with all costs and fees paid in full.

Alabama law also allows judicial foreclosure to the lenders, proceeding involves filing a lawsuit to obtain a court order to foreclose, and this option is used when “no power of sale” is present in the mortgage or deed of trust. Here court issues a final judgment of foreclosure on the request of lender leading to sale of property under publicly noticed sale.
When a mortgage or deed of trust contains the clause “no power of sale” the lender may opt the two ways after default 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. It must required to publish a 21 day notice regarding time, place, terms and purpose of the sale before the sale.
A deficit decision may be taken when a property in foreclosure is sold at a public sale for less than the loan amount which the primary mortgage secures.