Alabama Foreclosure Laws Explained

Understanding the Alabama Foreclosure Laws

The security instruments that are used in such judicial foreclosures are the deeds of trust and mortgages. A twelve month grace period is given wherein deficiency judgments and right of redemption is allowed for settlement of properties in foreclosed property listings. Default of payment causes the property to be listed as a foreclosure property and necessary legal procedures are undertaken. The "Power of sale" clause is a very important feature of agreements made for mortgage of property. Under this clause the borrower agrees to sell the property to settle loan balances when there is a default of payment.

If the security instruments used specifically mention a power of sale clause then a non-judicial foreclosure can be pursued. There is no court order needed to auction off distressed properties in such a case. The lender or his representative is empowered to hold a sale of the distressed property.

The terms specified regarding place, date and time of auction should be followed closely if the sale of a distressed property is because of the power of sale clause in the deed of sale or mortgage. However, if such details are not specified, the sale may be held at the county courthouse of the area where the distressed property is located.

Sale of foreclosed property should be done through an auction to the highest bidder for cash. The lender is required to issue a notice of sale and to hold an auction of foreclosure property before a specified time period. There are legal guidelines for such notices also. Notices regarding sale of foreclosure homes should appear once a week for four continuous weeks in the local county newspaper.

Procedure for repossessed homes for sale when there is power of sale clause involved

Under conditions where no power of sale clause is contained in the property sale or mortgage deeds, then the lender may opt for filing a lawsuit for foreclosure of the distressed property through a public auction. This process is referred to as a judicial foreclosure. Once the lawsuit is filed, a public notice regarding the sale of foreclosure homes should be published for four weeks in local newspapers. In case the county in question has no local newspaper, the notice for foreclosed properties for sale should appear in the newspaper of an adjoining county for the same time period.

However, lenders also have an option of forgoing the lawsuit and selling the foreclosure property outright. Alabama foreclosure laws lay down specific guidelines regarding foreclosed homes for sale and these guidelines should be closely adhered to.

Foreclosures in Alabama Top Cities

• Birmingham
• Montgomery
• Mobile
• Gulf Shores
• Huntsville
• Bessemer
• Pinson
• Phenix City
• Tuscaloosa
• Orange Beach
• Foley
• Decatur