- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust,
Mortgage
- Timeline: Varies by Process; Typically 90
days
- Right of Redemption: Varies by Process
- Deficiency Judgments Allowed: Varies by
Process
In Alaska, 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, has
been instituted more since the late 1980's, when lenders found that
they were foreclosing on residential property worth substantially
less than the amount owed. Generally, after the court declares a
foreclosure, your home will be auctioned off to the highest bidder.
In the case of judicial foreclosure, the process
is carried out according to the rules of equity, deficiency suits
are permitted and the borrower has no rights of redemption.
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, typically referred to as the trustee.
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, provided it meets the
minimum protection laws set forth by the State of Alaska. Otherwise,
the non-judicial power of sale foreclosure is carried out in the
following three phases:
The trustee must record a notice of default in the
office of the recorder of the recording district in which the
property is located not less than thirty (30) days after the default
and not less than three (3) months before the sale.
Said notice of default must state the name of the
borrower, the book and page where the deed is recorded and it must
describe the property, the borrower’s default, the amount the
borrower owes, and the trustee’s desire to sell. It must also state
the date, time and place of the sale.
Within ten (10) days after recording the notice of
default, the trustee must mail a copy of the same by certified mail
to the last know address of (1) the borrower, and (2) any person
whose claim or lien on the property appears of record or is known to
the lender of trustee and (3) any occupant. The trustee may have the
notice delivered personally instead of sending it by certified mail.
Any time before the sale, the borrower may cure
the default and stop the sale by paying a sum equal to the missed
payments plus attorney’s fees. The lender may not require the
borrower to pay off the entire remaining principal balance of the
loan to cure the default, just the missed payments and attorney’s
fees. If the lender has recorded a notice of default two or more
times, then the Alaska statutes provide that the lender can refuse
to accept the borrower’s monies for the missed payments and
attorney’s fees and proceed with the foreclosure sale instead.
The sale must be made at a public auction held at
the front door of a courthouse of the superior court in the judicial
district where the property is located. The trustee must sell to the
highest and best bidder and the lender may bid at auction.
The trustee may postpone sale of all or any
portion of the property by delivering to the person conducting the
sale a written and signed request for the postponement to a stated
date and hour. The person conducting the sale shall publicly
announce the postponement to the stated date and hour at the time
and place originally fixed for the sale. This procedure shall be
followed in any succeeding postponement.
When this type of foreclosure process is used, the
borrower has a right to redeem the property and deficiency suits are
not allowed.
More information on Alaska foreclosure laws.
