Alabama Foreclosure Law
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Varies by Process; usually 30 to 60 days
- Right of Redemption1: 12 months
- Deficiency Judgments2 Allowed: Yes
Lenders in the state of Alabama may foreclose on deeds of trusts or mortgages in default using either a non-judicial or judicial foreclosure process.
Judicial Foreclosure
A judicial process of foreclosure requires that the lender file a lawsuit and attain a court order to foreclose on a particular property. This type of process is generally used when no power of sale is present in the mortgage or deed of trust. A power of sale is a clause found in a deed of trust or mortgage that authorizes the sale or transfer of land as outlined by the terms of that clause. Note: a lender may, if no power of sale is present, elect to choose to pass on a lawsuit and foreclose by selling the property (see "No Power of Sale Foreclosure Procedure" below).
Non-Judicial Foreclosure
If a power of sale clause exists in the deed of trust or mortgage document, a non-judicial process of foreclosure is used. This allows the lender to sell the property and pay off the balance of the loan in the event the homeowner defaults. The power to sell may be completed by the lender or their representative in situations where a power of sale exists. The procedure for this type of foreclosure process is explained in the "Power of Sale Foreclosure Procedure" listed below.
No Power of Sale Foreclosure Procedure
If no power of sale is contained in a mortgage or deed of trust, the lender or their representative may, after the terms of the mortgage or deed of trust are broken, may begin foreclosure proceedings in a court having jurisdiction over the matter, or by selling for cash at the courthouse door of the county where the property is located, to the highest bidder, after notice of the time, place, terms and purpose of such sale has been given by four (4) consecutive weekly insertions of such notice in a newspaper published in the county where the property is located.
Power of Sale Foreclosure Procedure
If the deed of trust or mortgage has a power of sale clause and it details the time, place and terms of sale, then the outlined procedure must be followed. However, if the power of sale clause, does not clarify the time, place and terms of sale, then a foreclosure sale may be held at the courthouse door of the county where the property is located, after default of the deed of trust or mortgage, for cash to the highest bidder. Thirty (30) days after the last notice of sale is published is the earliest time that the sale may take place.
If a deed of trust or mortgage, with power of sale, does not define the place or terms of sale, or method of notice, a sale may be held at the courthouse door of the county where the property is situated, for cash to the highest bidder, after thirty (30) days' notice of the time, place and terms of sale by publishing such notice once a week for four (4) consecutive weeks in a newspaper.
If no newspaper is published in the county where the property is located, the notice shall be placed in a newspaper published in an adjoining county. The notice shall be published in said adjoining county for three (3) consecutive weeks.
1 A borrower’s right to reacquire property lost due to a foreclosure.
2 A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.
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