Alabama Foreclosure Process

Link to Alabama Foreclosure Laws

Alabama Foreclosure Overview

Alabama foreclosure allows for both the judicial (in court) and non-judicial (out-of-court) foreclosure processes, although most foreclosures are non-judicial in the state. Generally, the Alabama foreclosure process takes about 2-3 months.

Pre-foreclosure Period

Judicial foreclosures rarely occur in Alabama, and usually only happen when there are either problems concerning title to the property, or when the mortgage lacks a provision that allows the lender the right to sell the property when the borrower defaults. This provision is called a power of sale clause.

As such, non-judicial foreclosures are the most common in Alabama.

The borrower may make payment and therefore stop the foreclosure provided the payment is made prior to the foreclosure sale and all costs and fees are paid in full.

Although not required by state law, some mortgages require the lender to send a Notice of Default, (NOD) to the borrower 10-30 days before initiating the foreclosure process.

Notice of Sale & Auction

Prior to initiating a foreclosure, the attorney conducting it for the lender must obtain and file a notice of sale indicating the foreclosure will be pending. The lender must then publish a notice of foreclosure sale date for a minimum of three (3) weeks in a newspaper in the county in which the property is located. If there is no such newspaper in that county, then the newspaper in an adjacent county may be used. The notice must provide a description of the property, as well as the day, place, and terms of the sale. Most times, the notice is also sent to the borrower, although it is not required unless specifically called for in the mortgage.

If a borrower has other mortgage loans, those lenders typically receive notice as well. The sale takes place at the courthouse specified. After the foreclosure sale, and upon payment, a deed is given to the winning bidder.

However, even after the property has been sold at auction, the original borrower has the right to redeem the property for up to one year after the foreclosure sale date. it is also important to note that in an Alabama foreclosure, a deficiency judgment can be obtained when a property in foreclosure is sold at a public sale for less than the loan amount.

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