Know your lender's rights before selling your Alabama home in foreclosure. Regulations and requirements are different here
The inability to make mortgage payments is an increasing reality for many homeowners in Alabama. If you are in this situation, it can be helpful to understand foreclosure home selling regulations Alabama has instituted. Before listing your home for sale, you should know that, in Alabama, foreclosure is allowed in three ways:
- Through a foreclosure sale according to the “power of sale” terms in the mortgage
- A public sale in the event a power of sale clause does not exist
- Through the filing of a lawsuit for foreclosure
Of these three options, the first two are the most common for Alabama homes in foreclosure sales. Foreclosure sales take place a minimum of 30 days after the lender publishes an advance notification of the details of the sale weekly for four consecutive weeks. Foreclosure regulations in Alabama also stipulate that the notice must be published in the county where home is located.
The owners of Alabama homes in foreclosure can avoid the negative consequences a foreclosure has on their credit and exit a mortgage that is no longer financially feasible. But in some instances, homeowners cannot sell their house for the amount owed on the mortgage. You can try to sell your home for less than the amount that you owe, which is known as a short sale. In order to pursue a short sale, you’ll need to get approval from your lender.
Find a real estate agent who specializes in foreclosure sales here.
Keep in mind that you may still be responsible for the remaining balance of a short sale, known as the deficiency balance. This is quite important because Alabama foreclosure home sales regulations allow deficiency judgments. The state does not require the lender to waive the remaining balance even if the lender agrees to accept a short sale.
Your lender can:
- Opt to forgive the balance and provide a waiver of deficiency
- Ask you to pay back the balance through an unsecured note
- Pursue a deficiency judgment and attempt to collect the remaining balance
Due to foreclosure home selling regulations Alabama has established, you need to understand the lender's rights and your responsibilities for any remaining balance on your mortgage.
Reply! real estate professionals can assist during this difficult time and provide insight on Alabama home sales regulations.