Alabama Foreclosures

A Judicial Foreclosure takes place in states that require the civil court system to be involved in the process. Generally, the lender must file a civil law suit for mortgage foreclosure against the homeowner in default. The court then employs their normal civil law systems.

1. The homeowner must be served with court papers stating that they are being sued and instruction that they appear in court.
2. The homeowner usually has 20 days to respond to this summons.
3. Once the homeowner responds the court will review to ensure the case is valid and will then set a hearing date for the case to be heard.
4. If the homeowner does not respond within the 20 days, the court will assume the case is valid and proceed to set a hearing date.
5. At the hearing the judge will usually award the case to the “plaintiff” (the lender), and order the property sold at public auction and the proceeds be given to the holders of the mortgages and liens against the property.
6. Occasionally, a judge will give the homeowner or “defendant” additional time however, this is rare since the only “good” or “sufficient” argument against the law suit is to pay the money owed to the lender or “plaintiff”.

A Non-Judicial Foreclosure takes place when there is a “Power of Sale” clause in the mortgage documents. This clause allows the lender to foreclose and gain possession of the property without the involvement of the court system. In states which allow a Non-judicial Foreclosure the lender normally is required to post notice in a public legal publication that they have begun the procedure of foreclosure. They are required to post these notices more than once. Most states require three postings. Once the third posting in made, the lender may give “power of attorney” to anyone they wish to sell the home at public auction. Several states allow this process to be completed in three weekly postings or 21 days from the date of the first posting.

1. They must have a “Power of Sale” clause in the mortgage documents.
2. They must post notice in a legal, public news publication.
3. After 21 days or more and three consecutive postings, the lender may have the property sold at public auction.

Click here to review Alabama's state legislation