If you’re facing a foreclosure of your Alabama home, it’s a good idea to get as much information as possible about the process—especially information about how long the foreclosure will probably take. While most homeowners are entitled to a 120-day preforeclosure period under federal law, once it expires, all the foreclosing bank typically must do is publish notice about the foreclosure in the newspaper for three consecutive weeks before selling the house.
In this article, you’ll learn about foreclosure procedures and laws in Alabama, and get information about your rights during and after the process.
Because the majority of foreclosures in Alabama are nonjudicial, this article focuses on that process.
You can find the state's foreclosure laws in the Alabama Code Sections 35-10-1 to 35-10-30, and Sections 6-5-247 to 6-5-257. Below you’ll find a summary of some of the key features of Alabama foreclosure law along with relevant citations to the statutes so you can read the law yourself. (If you need help finding the statutes, see Finding Your State’s Foreclosure Laws.)
Keep in mind that statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you’re facing a foreclosure.
In Alabama, the bank has to publish notice of the foreclosure sale in a newspaper for three consecutive weeks before the sale. (Ala. Code § 35-10-13).
While Alabama law doesn’t require the bank to notify the homeowner in person or by mail, many mortgages contractually require the bank to send a breach letter. This letter notifies borrowers about the default and that a foreclosure will start if they don’t cure that default. 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.
Homeowners facing a foreclosure typically qualify to take part in a statewide foreclosure mediation program.
Under Alabama’s mediation program, trained mediators help the homeowner and bank work together to try to find a way to avoid foreclosure, often with a modification. To learn more, go to the Alabama Center for Dispute Resolution’s website.
For mortgages taken out after August 1, 2009, Alabama provides special protections against foreclosure to the surviving spouses and the estates of servicemembers who die while on active military duty overseas.
Lenders are prohibited from initiating foreclosure proceedings for 180 days following the servicemember’s death, so long as the spouse or the estate notifies the lender about the death and asks for the delay. (Ala. Code § 35-10-71). (To learn more, read Nolo’s article Foreclosure Protections for Military Servicemembers Under Alabama Law.)
“Reinstating” is when you catch up on the defaulted mortgage's missed payments, plus fees and costs, in order to stop a foreclosure.
Under Alabama law, you don’t get the right to reinstate the mortgage before the sale. Even though state law doesn’t provide you with a right to reinstate, the bank might allow you to pay the money you owe to bring your account current. Also, your mortgage contract might give you the right to complete a reinstatement by a particular deadliine.
In some states, you can redeem your home within a certain period of time after the foreclosure.
Alabama law generally gives homeowners one year to redeem the home after a foreclosure sale. 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)). (To learn about filing a homestead on your property, go to the Alabama Department of Revenue website.)
The bank must mail you a notice about the right to redeem the home at least 30 days before the foreclosure sale. If the bank 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)).
The redemption period is one year from the foreclosure sale date for non-homestead properties.
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).
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the foreclosing bank to seek a personal judgment, which is called a “deficiency judgment,” against the borrower for this amount. Other states prohibit deficiency judgments with what are called anti-deficiency laws.
Alabama doesn't have an anti-deficiency law. If you lose your home to foreclosure in Alabama, the bank may sue you to get a deficiency judgment. Once the bank 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 bank levy). (Find out more about how a bank collects its deficiency judgment.)
After an Alabama foreclosure sale, the purchaser must give you ten days’ notice to leave before starting eviction proceedings.
If you have questions about the foreclosure process in Alabama or want to learn about potential defenses to a foreclosure, consider talking to a foreclosure lawyer. It’s also a good idea to make an appointment to speak to a HUD-approved housing counselor, especially if you want to learn about different foreclosure avoidance options.