For some Alabamians, the American dream of owning a home has become a nightmare. One in sixty Alabama homeowners is projected to experience foreclosure on their home as a result of a high-cost loan. In Alabama, foreclosure proceedings can be concluded in as few as 21 days.
Having financial issues such as foreclosure concerns or high credit card balances means people are vulnerable for making poor financial decisions. Many homeowners threatened with foreclosure cannot afford to hire a lawyer. However, our attorney’s at Bond & Botes can offer hope to many who face foreclosure in order to save their home.
Understanding the Foreclosure Process
What can we do to help our clients understand the foreclosure process? First, know that there are more options available to a client the earlier he or she addresses the delinquency of the mortgage payments. In addition, penalties and fees will be kept to a minimum the earlier a pending foreclosure is addressed. Many mortgage companies are open to some alternate payment plans that will enable a client to avoid foreclosure. Lenders are eager to help, because when a mortgage company forecloses on a house, they typically lose a great deal of the value of money that they loaned. Bankruptcy is one option available that will stop foreclosure. Since the bankruptcy laws changed in 2005, there is more required of filers to get the protection bankruptcy provides to consumers. So time is of the essence when dealing with the threats of foreclosure. All of our attorneys with Bond & Botes will represent consumer debtors to file a Chapter 13 bankruptcy with only a small portion of their fee being paid prior to the petition being filed. A Chapter 13 bankruptcy allows a consumer to stop a foreclosure and cure the arrearage owed over a period of time sometimes up to sixty months. Finally, attorneys should make sure that the foreclosure process is carried out according to the terms of the mortgage or deed of trust.
In Alabama, judicial foreclosures are used when no power of sale is present in the mortgage or deed of trust. This involves filing a lawsuit to obtain a court order to foreclose. When no power of sale is present, lenders may choose to forego a lawsuit and foreclose by selling the property. If no power of sale is 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 located. The sale must comply with the time, place, terms and purpose as published for four consecutive weeks in a newspaper published in the county where the property is located. Judicial foreclosures are extremely rare. The great majority of foreclosures in Alabama are non-judicial foreclosures.
Non-judicial foreclosures are used when a power of sale clause is present in a mortgage or deed of trust in Alabama. This power of sale is authorized by the borrower in the mortgage or deed of trust. If the mortgage or deed of trust contains a power of sale, then the specified procedure in the document must be executed according to the terms outlined. If there are no terms as to the time, place and terms of sale, then a foreclosure sale may take place at the front door of the county courthouse where the property is located, after default of the deed of trust or mortgage, for cash to the highest bidder. The notice of sale must be given by publication once a week for four consecutive weeks in a newspaper published in the county in which the property is located. The time, place and terms of the sale along with the description of the property must be included in the notice.
In Alabama, the borrower has the right to redeem the property after the foreclosure sale, up to one year after the foreclosure sale date. This right to redemption can be waived, however, if the borrower fails to vacate the premises within ten days of receiving a written demand to do so following the foreclosure.
Of course, prevention is the best medicine. That’s why Congress is now demanding that lenders help educate borrowers about such things as how to choose a mortgage loan or a refinance strategy that’s appropriate, manageable and more importantly, affordable.
Please call one of our Bond & Botes offices today to see how we can help you with your pending foreclosure.
Gail Hughes Donaldson is a Managing Partner of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She’s been helping families work through the bankruptcy process since she started with Bond & Botes back in 1993 as a paralegal. Read her full bio here.