Alabama Foreclosure Laws
Expected Timeline: One to three months
Security Instrument: Mortgage or Deed of Trust
Type of Process: Judicial or Nonjudicial
Protections for Servicemembers: Ala. Code § 31-12-1 to 31-12-10
Time to Respond: Foreclosing party required to publish notice in newspaper of general circulation for four weeks. There is no requirement that the homeowner be served a copy by mail.
Reinstatement Period: None.
Protections for High-Cost Mortgages: None.
Redemption Period: Twelve months after sale in judicial foreclosure.
Eviction Process: No specific notification process.
Deficiency Judgments: Allowed in judicial foreclosure. Not allowed in nonjudicial foreclosure.
Limits on Deficiency Judgments: Deficiency judgments are possible. No limits.
Cash Exempted in Bankruptcy: None.
State Statutes: Ala. Code § 35-10-1 to 35-10-30, 6-5-247 to 6-5-256
Under Alabama foreclosure law, the Judicial Foreclosure process is used when no power of sale clause is present in the mortgage or deed of trust. Lenders, though, may choose not to pursue a foreclosure lawsuit and sell the property. The lender, or any party the mortgage or deed of trust has been assigned to, may pursue either of two options. This can only be done after default of the mortgage or deed of trust. The first option would be to file a lawsuit to foreclose; the second would be to foreclose by selling the property to the highest bidder for cash at the courthouse door of the county where the property is situated. The sale of the property may not take place until after a notice of the time, place, details and reason for the sale has been published for four (4) consecutive weeks in a newspaper. The newspaper must be published in the county wherein the property is located.
The Non-Judicial Foreclosure process is used when a power of sale clause is present in the mortgage or deed of trust. This clause authorizes the lender to sell the property to pay off the mortgage or deed in trust in the event the borrower defaults. This ability to sell the property may be given to the lender or the lender’s representative to execute.
If the mortgage or deed of trust contains a power of sale clause and outlines the time, place and details of the sale, then this specified process needs to be followed. However, if the mortgage or deed of trust contains a power of sale clause, but it does not outline the time, place and details of sale, then a sale may take place at the front or main door of the courthouse of the county where the property located. This may be done only after default of the deed of trust or mortgage, and the property will be sold for cash to the highest bidder. The sale at the courthouse may not take place until thirty (30) days after the last notice of sale is published.
A notice of sale must be published once a week for four (4) successive weeks in a newspaper that is circulated in the county in which the property is located. If the property is under mortgage in more than one county, the publication is to be made in all counties where it is located. The notice of sale must give the time, place and terms of the sale, as well as a description of the house to be sold. If there is not a newspaper published in the county where the property is located, the notice must be placed in a newspaper published in an nearby county for four (4) successive weeks.
State Website: www.legislature.state.al.us