What Is Alabama’s Wrongful Foreclosure?

If you’re reading this, we assume that you (or a friend or family member) are in danger of losing your home to foreclosure and would like further information. We congratulate you on researching to learn more.

Unfortunately, this is an issue that we will have to revisit frequently. The large banks and mortgage businesses are counting on you to:

• you are unaware of your legal rights
• will do nothing, even if you are aware of your rights.

Demonstrate to these thugs that you are aware of your rights, and then take action. People with varying levels of understanding about foreclosures visit us. Some people have no idea what foreclosures are. Others include bank officials and seasoned real estate agents with vast experience.

We’ve divided this lengthy post into sections with headings so you can go to the sections that will be most useful to you.

What Are The Repercussions Of Foreclosure?

• You will be evicted from your home.
• A foreclosure will usually show up on your credit reports, and it is one of the most destructive things that can happen to your credit.
• You will lose your right of redemption if you do not depart the residence within the time restriction (usually ten days after the foreclosure sale) (right to buy back the house within one year).
• You can also be sued for eviction and for the shortfall, which is the difference between the amount owed (plus costs, expenses, and attorney fees) and the amount received by the lender from selling your residence on the courthouse steps.

What Is The Difference Between A Judicial And A Non-Judicial Foreclosure State In Alabama?
Alabama is a state that allows for “non-judicial” foreclosures. Here’s what “non-judicial” foreclosure means in practice.

The court is not involved in a non-judicial foreclosure state (such as Alabama). The mortgage company or servicer must merely follow the law, and the house will be foreclosed and sold on the courthouse steps. It would be best if you double-checked that this was done, as we’ve seen cases when the bank claimed to have completed this step.

On the other hand, our clients were present and were aware that nothing had been accomplished. In our opinion, this effectively ends the foreclosure process. You may compare it to repossession in that the corporation just puts you in default, announces it, and then sells your home at a foreclosure auction.

The foreclosing corporation must file a lawsuit against the homeowner in a judicial foreclosure state (such as Florida). The judge must then find the company’s favor for the foreclosure to proceed.

A mortgage company can technically pursue a lawsuit in Alabama, although this rarely happens. A mortgage company can undertake a non-judicial foreclosure in a couple of weeks rather than waiting a year or more to do a court foreclosure.

The mainline is that the rapidity with which a foreclosure can occur can be alarming. Especially if you read about judicial foreclosure places like Florida or New York or talk to folks, who live there. If you face a non-judicial foreclosure in Alabama, you must move promptly.

In Alabama, how does non-judicial foreclosure work?
The basic procedure is for the mortgage company to declare you in default of the note, at which point the note will be “accelerated.”

This signifies that everything is due right now.

The company will then place a three-week advertisement in your local newspaper.

After three weeks, the house will be sold at the courthouse steps at the advertised time (between 11 a.m. and 4 p.m.) (main entrance). The foreclosure deed will be recorded in the county’s probate court, where your property is located by whoever buys the property at the foreclosure sale – which is usually the firm that supposedly possessed the note before the foreclosure.

The new “owner” can then file a lawsuit to evict you from your home.

What Is A Mortgage Servicer, And How Does It Work?
This is the firm in charge of the day-to-day processing of a mortgage loan, often known as “servicing.” Sending statements, receiving payments, arranging payoffs, charging and collecting late fees and expenses, and so on are all part of this process. The firm that holds your loan is almost always a Trust — an investment entity – with no staff, so service is engaged to conduct the work.

What Is Securitization And What Does It Mean For Foreclosure Victims?
As previously stated, this means that investors can invest in a trust that holds your note.
Consider thousands of loans that are bundled together and then broken down into smaller chunks for investors.
Even if every loan is a fixed-rate 30-year loan, someone can choose to invest for a short period.
Someone else might be looking for a high-return investment, which is plausible.

However, it will not benefit you if you do nothing because Alabama is a non-judicial state, and no judge will ever notice that the mortgage firm does not have the original note…

When there is a catastrophe – and the foreclosure crisis our country and state are experiencing qualifies as a tragedy – scam artists will try to take advantage of victims. Use your common sense to determine how much information the individual promising to assist you are willing to disclose.

Scammers frequently “hide” information, claiming that you must purchase their product or service before the specifics may be revealed. Here are some examples of frauds you may have encountered or will encounter:

• Rent to buy – the promise is that you will be able to buy your home and then rent it back. Frequently, the rescuer fails to make the payments, and your home is foreclosed on.
• Straw men – sell your property to someone who will rent it back to you or sell it to you for a reasonable price, but you may be evicted, and your money will have been squandered, just like with rent to buy.
• Phantom counseling — a tens of thousands-of-dollar upfront cost to negotiate with your mortgage company. You must discontinue all contact with attorneys, mortgage companies, credit counselors, and other professionals. You must also pay your mortgage payment to the “rescuer,” who frequently does not negotiate and does not transmit your money to the mortgage company.