Foreclosure Process and Laws in Alabama

Facing a foreclosure can be overwhelming, especially if you're unsure of your rights and don't know what to expect during the process. Under Alabama foreclosure laws, the foreclosure process is typically nonjudicial, meaning it doesn't require court involvement, although judicial foreclosures are also permitted.

Whether you're already behind on your mortgage payments or concerned about missing one, you should understand how Alabama's foreclosure laws work and what protections are available to you under both state and federal law. This article outlines your rights during the Alabama foreclosure process, explains key legal procedures, and explains some options you might have to avoid losing your home.

What Are My Foreclosure Rights in Alabama?

Both federal and state laws govern foreclosure procedures in Alabama, and your mortgage contract gives you rights during the process.

Your Mortgage Rights in Alabama

If you get a loan to buy residential real estate in Alabama, you'll likely sign two documents: a promissory note and a mortgage.

• Promissory note. The promissory note is the document that contains your promise to repay the loan along with the repayment terms.
• Mortgage. The mortgage is the document that gives the lender a security interest in the property. If you fail to make the payments, the mortgage provides the lender with the right to sell the home at a foreclosure sale to recoup the money it loaned you. If the mortgage contains a power of sale clause, the lender can foreclose without going to court.

You also get certain contractual rights under the promissory note and mortgage. For example, if you're late making your monthly payment, most promissory notes provide a grace period of ten to fifteen days before you'll incur late charges. To find out the grace period in your situation and the amount of the late fee, check the promissory note.

Many mortgages in Alabama have a provision that requires the lender to send a breach letter if you fall behind in payments. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and go ahead with the foreclosure.

Your Rights Under Federal Foreclosure Laws

In most cases, federal mortgage servicing laws require the loan servicer to contact you (or attempt to contact you) by phone to discuss foreclosure alternatives, called "loss mitigation" options, no later than 36 days after a missed payment and again within 36 days after each following missed payment. (12 C.F.R. § 1024.39 (2025).)

No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available and assign personnel to help you. There are a couple of exceptions to these requirements, like if you file for bankruptcy or tell the servicer not to contact you under the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39) (2025).)

Federal law also generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41 (2025).)

Protections If You're in the Military

If you're in the military, the federal Servicemembers Civil Relief Act provides certain legal protections against foreclosure.

Other Foreclosure Rights for Alabama Homeowners

Under Alabama foreclosure laws, you'll also get certain rights, which are detailed below.

State Foreclosure Laws in Alabama

Again, most Alabama foreclosures are nonjudicial.

Notice of the Foreclosure

In Alabama, the lender has to publish notice of the foreclosure sale in a newspaper for three consecutive weeks before the sale. (Ala. Code § 35-10-13 (2025).)

While Alabama law doesn't require the lender to notify you in person or by mail about the foreclosure, many mortgages contractually require the lender to send a breach letter, as noted above. Also, if you took out your mortgage on or after January 1, 2016, you'll likely receive a notice about your right to redeem (see below) at least 30 days before the foreclosure sale.

Attending Foreclosure Mediation in Alabama

Typically, homeowners facing a foreclosure in Alabama qualify to take part in a statewide foreclosure mediation program. Under Alabama's mediation program, trained mediators help the homeowner and lender work together to try to find a way to avoid foreclosure, often with a modification. To learn more about foreclosure mediation, go to the Alabama Center for Dispute Resolution's website.

How a Foreclosure Sale Works in Alabama

The foreclosure sale is a public auction.

What Are the Options Available for Borrowers During Foreclosure in Alabama?

You might be able to prevent a foreclosure sale by reinstating the loan, redeeming the property before or after the sale, filing for bankruptcy, or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.

Right to Reinstate Before a Foreclosure Sale in Alabama

"Reinstating" is when a borrower pays the overdue amount, plus fees and costs, to bring the loan current and stop a foreclosure. Alabama law doesn't give you the right to reinstate the mortgage before the sale. However, even though state law doesn't give a legal right to reinstate, your lender might allow you to pay the money you owe to bring your account current, or the terms of your mortgage contract might give you the right to reinstate before the sale.

Redemption Period After a Foreclosure Sale in Alabama

One way to stop a foreclosure is by "redeeming" the property. To redeem your home, you pay the total loan amount before the foreclosure sale. Some states, including Alabama, also provide foreclosed borrowers a redemption period after a foreclosure sale, during which they can repurchase their home. Alabama law generally gives homeowners one year to redeem the home after a foreclosure sale. (Ala. Code § 6-5-248(b) (2025).)

But if you took out the mortgage on or after January 1, 2016, Alabama law provides a 180-day redemption period after the foreclosure sale. This law applies to residential properties on which a homestead exemption was claimed in the tax year during which the sale occurred. (Ala. Code § 6-5-248(b) (2025).) To learn about filing a homestead on your property, go to the Alabama Department of Revenue website. The lender must mail you a notice about the right to redeem the home at least 30 days before the foreclosure sale. If the lender doesn't provide the notice before the sale, you get 180 days to redeem the homestead property from the date the notice is provided. But under no circumstances may a right of redemption be exercised later than one year after the date of foreclosure. (Ala. Code § 6-5-248(h) (2025).)The redemption period is one year from the foreclosure sale date for non-homestead properties. (Ala. Code § 6-5-248(b) (2025).)

If you don't move out of the house within ten days after the purchaser gives you a written demand for possession, you'll lose the right to redeem. (Ala. Code § 6-5-251 (2025).)

Filing for Bankruptcy

If you're facing a foreclosure, filing for bankruptcy might help. Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction prohibiting the lender from foreclosing on your home or trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months and eliminate other debts. But if you're behind in mortgage payments when you file, you probably won't be able to keep your home. To stay in your house, you must be current on payments and be able to protect your equity with an exemption. However, you won't owe anything after foreclosure because Chapter 7 erases mortgage debt. If you want to save your home and you're behind in payments, filing for Chapter 13 bankruptcy might be the answer. To find out about the options available, speak with a local bankruptcy attorney.

Eviction After Foreclosure

After an Alabama foreclosure sale, the purchaser must give you a ten-day demand for possession before starting eviction proceedings. (Ala. Code § 6-5-251 (2025).)

Deficiency Judgments Following the Sale in Alabama

Sometimes, when a home sells at a foreclosure sale, the sale doesn't bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance." Many states, like Alabama, allow the lender to get a personal judgment, which is called a "deficiency judgment," for this amount against the borrower.

If you lose your home to foreclosure in Alabama, the lender might sue you after the foreclosure to get a deficiency judgment. Once the lender gets a deficiency judgment, it may try to collect on it by, for example, going after your paycheck through a wage garnishment or your bank account with a levy.

Tips When Facing an Alabama Foreclosure

• Open your mail. Again, the only written notices you get before a foreclosure sale might be a breach letter and/or a notice about redeeming the property. Keep an eye out for them if you're behind in mortgage payments; these letters tell you a foreclosure is imminent.
• Contact your loan servicer. If you're behind in payments, communicate with your loan servicer (the lender's representative). Having an open dialogue will keep you in the loop. You can find out when the servicer begins the foreclosure process and what's happening in the process. Talking to your servicer can also lead to a solution to your payment arrears, such as a loan modification or repayment plan.
• Be informed about your rights and options. You might want to challenge the foreclosure in court by filing your own lawsuit, especially if the servicer violated state or federal foreclosure laws. Learn these laws and know your rights. Or you might want to apply for a loan modification, short sale, or deed in lieu of foreclosure, which could help you keep your home or minimize your losses. Know your options and pursue them immediately. Remember, foreclosures move fast in Alabama. You need to be proactive.

Getting Help from an Alabama Foreclosure Lawyer

Foreclosure laws are complicated. Servicers and lenders sometimes make errors or forget steps. If you think your servicer or lender failed to complete a required step, made a mistake, or violated state or federal foreclosure laws, you might have a defense that could force a restart to the foreclosure, or you might have leverage in working out an alternative.

Consider talking to a local foreclosure attorney or legal aid office immediately to learn about your rights. A lawyer can also tell you about different ways to avoid foreclosure. Likewise, a HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure.