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Alabama Foreclosure Laws

Alabama foreclosures are usually performed through non-judicial procedures, although judicial foreclosures are available and do occur. The only real reason for a judicial foreclosure would be if there were problems with the property title, or the mortgage agreement in question did not contain a Power of Sale clause. A Power of Sale clause allows the lender to pursue a foreclosure without obtaining a court order to do so, and is the legal basis for all non-judicial foreclosures.

Many mortgage agreements may call for the lender to notify the homeowner 10-30 days before non-judicial Alabama foreclosures actually begin, but this is not required under Alabama foreclosures law. The homeowner has the power to stop any kind of foreclosure up until the day of a foreclosure sale by paying off the default amount owed to the lender.

In order to properly advertise before a sale, Alabama foreclosures law requires that the lender issue a Notice of Sale containing the date, terms and location of the sale, as well as a brief description of the property being sold. The Notice of Sale must be published in a local weekly newspaper for three weeks leading up to the day of the sale. The Notice must also be posted on the door of the county courthouse and in three other public places. Usually, the lender serves the homeowner and any Junior Lien holders with the Notice of Sale as well.

On the day of the scheduled sale, a trustee of the lender or a court clerk auctions off the homeowner's property to the highest bidder. Once that person has provided payment for their bid, they are entitled to ownership of the property.

The original homeowner has the power to redeem ownership by paying its full sale price in addition to any other costs within one full year after the conclusion of the sale.

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