ALABAMA FORECLOSURE LAW
Judicial, Non-Judicial Foreclosures
Here's a brief breakdown of the Alabama foreclosure law. Some facts and important information are listed in the table and are defined more thoroughly just below the table:
- Judicial Foreclosures - YES
- Non-Judicial Foreclosures - YES
- Primary Security Instruments - Deed of Trust, Mortgage
- How long does it take? - About 2 to 3 months
- Right of Redemption - 12 months
- Deficiency Judgments Allowed? - YES
- Sale Publication Period - 21 days
- Sale/NTS - Trustee
JUDICIAL FORECLOSURES
In the rare case that a lender goes to court and initiates a judicial foreclosure against the borrower, the court will issue judgement in the case of the foreclosure. With the judicial process, the sheriff will instead sell the property as a publicly noticed sale and the complaint is file in court instead. Another document called a lis pendens is filed, which is a notice to the public the property will be undergoing foreclosure and is unique to the judicial method of foreclosure.
NON-JUDICIAL FORECLOSURES
With Alabama foreclosure law, both judicial and non-judicial foreclosure methods are used, while judicial methods are not as common. In Alabama, the mortgage document that is signed will normally contain a power of sale clause. If the borrower defaults on the loan and a non-judicial foreclosure is initiated, and attorney will file a notice of sale to start the foreclosure process on the defaulted loan. Before being allowed to deliver the notice of sale, the attorney will enter an intent to sale publication period of 21 days and publish a notice of foreclosure on the property. In this period of time, the borrower may can make a payment to satisfy the lender and cease the foreclosure process. If no such payment is made, in the state of Alabama, the sheriff will then auction the property to the highest bidder.
TIMELINE
As noted above, it normally takes between two to three months to complete the foreclosure process. That timeline is based upon a non-judicial foreclosure that is not contested by the borrower. It can take longer if the borrower goes to court to contest the decision of foreclosure by the lender. The process may also be delayed if the borrower is undergoing bankruptcy.
RIGHT OF REDEMPTION
There is a right of redemption period in Alabama foreclosure law. This period lasts for twelve months and allows the borrower to reclaim the property only if the unpaid balance, which normally includes additional penalty costs, is paid in its entirety.
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