In Alabama a foreclosure does not have to go through the court system. Sometimes a lawsuit can be in the final stage of foreclosure.
Before there can be a sale the mortgage company sends a notice that the loan is being accelerated and that a foreclosure sale will occur in 30 or more days. The loan company must advertise the foreclosure sale in the newspaper in the county where the property is located for three consecutive weeks. If the property shows up in the legal notices then the borrower needs to try to get a loan modification, reinstate the loan, or obtain another loan. It may also be a good time to seek advice from a bankruptcy lawyer on filing a chapter 13 bankruptcy to stop the foreclosure. Many times the mortgage company or loan officer has not followed the letter of the law. The borrower may want to check with a lawyer to see if they can sue the mortgage company. A suit will often stop the foreclosure sale.
Sometimes the mortgage company will decide to sell the property on a different date than was published in the paper. If the company fails to give proper notice of this change, the sale may be considered an illegal sale. The sale usually happens on the courthouse steps. The sale starts right on time. We have had people show up for the sale five minutes after the published time only to find out that the property was sold to the high bidder. Anyone with the money or the credit can buy the property at the sale; the mortgage company, the original owner or an investor.
The new owner will need to record a foreclosure deed in the probate court of the county where the home is located.
Usually a letter is mailed by the new owner the day after the foreclosure sale. The letter informs the borrower that they have ten days to leave the property. If the owner fails to leave then they will lose their right of redemption. In Alabama a borrower has twelve months to redeem or buy back the foreclosed property.
If the borrower stays in the home after the ten days the new owner must file an ejectment lawsuit. Often the lawsuit requests that any deficiency be paid and for the judge to declare that right of redemption has been lost.
The borrower must answer the lawsuit within thirty days. Many people just don't file an answer. This is when a default judgment is entered against them which will include being ordered out of the home. Often the answer will include filing counterclaims against the company or new owner. The counterclaim is often for fraud or a broken contract.
Often the mortgage company is located in another state but must sue in Alabama. The judge will usually require a corporate representative to come to Alabama to give a deposition and to attend the trial.
Rebecca Green Thomason
Attorney at Law
115 South Jackson Ave
Russellville Al 35653
lawyerthomason@gmail.com
greenthomason.com
256-331-0800
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