How foreclosure works in Alabama

The notices you will receive in Alabama, in order

1. Default letter from your servicer

   After you fall behind, on the schedule in your mortgage contract

   Alabama law does not set the wording or timing of this letter. Your mortgage contract may require it and it usually states the amount needed to catch up and a deadline. Read it closely and ask your servicer in writing for help options right away.

2. Notice about redemption rights

   Mailed by the lender by certified mail at least 30 days before the sale, if you claimed a homestead exemption

   This short notice says Alabama law gives some people the right to redeem the property and that programs may exist to help. Keep the envelope and the notice. Your time to redeem does not start until this notice is given.

   Ala. Code § 6-5-248(h)

3. Published notice of sale

   Printed once a week for three weeks in a row in a newspaper in the county where the home is

   This is the official notice of the foreclosure sale. It must give the time, place and terms of the sale and describe the property. For homestead property it must also include the redemption rights wording.

   Ala. Code §§ 35-10-13, 6-5-248(h)

4. Auction at the courthouse door

   On the sale date, between 11 a.m. and 4 p.m.

   The sale is held at the front or main door of the county courthouse. The lender or an outside bidder buys the home and receives a foreclosure deed, which passes legal title.

   Ala. Code §§ 35-10-12, 35-10-14

5. Written demand for possession

   Sent by the buyer after the sale

   This letter tells you to move out. You have 10 days after the demand to leave. Staying longer makes you lose your right to redeem the home.

   Ala. Code § 6-5-251

6. Statement of lawful charges

   Within 10 days after you ask the buyer in writing

   If you want to buy the home back, you send the buyer a written demand for the amount owed. The buyer must send you an itemized statement of the debt and lawful charges within 10 days.

   Ala. Code § 6-5-252

The legal steps in Alabama

1. You miss payments

   Your servicer must try to reach you and tell you about options to avoid foreclosure. Under federal rules it usually cannot start the foreclosure until you are more than 120 days behind. Use this time to ask for help in writing.

   12 C.F.R. § 1024.41(f)

2. Default letter and redemption notice

   Your mortgage contract may require a letter that tells you how much you owe and gives you time to catch up, so read your mortgage for that deadline. If you claimed a homestead exemption on the home, the lender must also mail you a notice about redemption rights by certified mail at least 30 days before the sale date.

   Ala. Code § 6-5-248(h)

3. Sale is advertised

   The sale notice must run once a week for three weeks in a row in a newspaper in the county where the home is. The notice gives the time, place and terms of the sale. State law does not require a court hearing first.

   Ala. Code § 35-10-13

4. Auction at the courthouse

   The home is sold to the highest bidder at the main door of the county courthouse between 11 a.m. and 4 p.m. on the sale date. The lender is often the buyer. The buyer receives a foreclosure deed.

   Ala. Code §§ 35-10-12, 35-10-14

5. Demand for possession

   The buyer can send you a written demand to move out. You have 10 days after that demand to leave. If you stay past the 10 days, you lose your right to buy the home back, and the buyer can ask a court to remove you.

   Ala. Code § 6-5-251

6. Redemption period

   After the sale you may still be able to buy the home back by paying the sale price plus interest and other lawful charges. You have 180 days if you claimed a homestead exemption on the home for the year of the sale, or one year for other property.

   Ala. Code §§ 6-5-248, 6-5-253

Common questions in Alabama