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Alabama Foreclosure Law Summary
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust,
Mortgage
- Timeline: Varies by Process; Typically 30 -
60 days
- Right of Redemption: 12 months
- Deficiency Judgments Allowed: Yes
In Alabama, lenders may foreclose on deeds of
trusts or mortgages in default using either a judicial or
non-judicial foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which
involves filing a lawsuit to obtain a court order to foreclose, is
used when no power of sale is present in the mortgage or deed of
trust. However, when no power of sale is present, lenders may, at
their option, choose to forego a lawsuit and foreclose by selling
the property, as outlined below in the "No Power of Sale Foreclosure
Guidelines".
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used
when a power of sale clause exists in a mortgage or deed of trust. A
"power of sale" clause is the clause in a deed of trust or mortgage,
in which the borrower pre-authorizes the sale of property to pay off
the balance on a loan in the event of the their default. In deeds of
trust or mortgages where a power of sale exists, the power given to
the lender to sell the property may be executed by the lender or
their representative. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale Foreclosure
Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power
of sale clause and specifies the time, place and terms of sale, then
the specified procedure must be followed. However, if the deed of
trust or mortgage contains a power of sale clause, but does not
specify the time, place and terms of sale, then a foreclosure sale
may take place at the front or main door of the courthouse of the
county where the property located, after default of the deed of
trust or mortgage, for cash to the highest bidder. The sale may not
take place until thirty (30) days after the last notice of sale is
published.
Said notice of sale must be given by publication once a week for
four (4) successive weeks in a newspaper published in the county or
counties 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 said sale, together with a description of
the property. If no newspaper is published in the county where the
lands are located, the notice shall be placed in a newspaper
published in an adjoining county for four (4) successive weeks.
No Power of Sale Foreclosure
Guidelines
If no power of sale is contained in a mortgage or
deed of trust, the lender, or any assignee thereof, may, after
default of the mortgage or deed of trust, either file a lawsuit to
foreclose or foreclose by selling the property to the highest bidder
for cash at the
courthouse door of the county where the property
is situated. Said sale may not take place until after notice of the
time, place, terms and purpose of the sale has been published for
four (4) consecutive weeks in a newspaper published in the county
wherein said lands, or a portion thereof are situated.
More information on Alabama foreclosure laws.
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