Alaska 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 foreclosure process takes about 3-4 months.
Alaska primarily operates as a trust deed state. Also, Alaska foreclosure law permits mortgages to serve as liens upon the property and for judicial foreclosures to occur through the courts. However, since the power of sale provision in deeds of trust is a faster vehicle to complete a foreclosure, this is the primary method used. often times, lenders will use a judicial note action to seek a summary judgment on the note for the full indebtedness and then sell the property in order to satisfy the judgment. This process is only used when the value of the property is less than the amount owed.
The quickest method of foreclosure in Alaska involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action but requires a specific notice called an “election to foreclose”. When the trust deed is initially signed it will normally have a provision called a power of sale clause, which upon default allows a trustee to sell the property in order to satisfy the underlying loan. There are very strict notice requirements and specific legal documents are required to contain power of sale language in order to use this type of foreclosure method.
Notice of Sale & Auction
Prior to initiating a foreclosure and not less than thirty (30) days after default, the lender must file a notice of default at the county courthouse where the real estate is located. Within ten (10) days after the filing of the notice, a copy of the notice must then be mailed by certified mail to the defaulting borrower.
The notice of sale is required to have certain information, including the date, time and place of sale, as well as a description of the default, the lenders election to sell, and the recording information from the deed of trust.
The property owner can stop the foreclosure by bringing the loan current before the day of the sale schedule date with one caveat. If they have been in default twice previously the trustee can refuse payment and continue with the sale. The sale may also be postponed upon public notice up to the date of the sale.
In Alaska, the lenders can also go to court in a judicial foreclosure proceeding as well, where the court must issue a final judgment of foreclosure. If the deed of trust does not contain the power of sale language, the lender will have to seek judicial foreclosure. The property will then sold at auction as part of a publicly noticed sale. A complaint is filed in court along with what is known a “lis pendens” which is a recorded document that provides public notice that the property is being foreclosed on.