Judicial foreclosure
When a lender uses court action to sell a property
in order to pay a mortgage in default
If a deed of trust or mortgage doesn’t have a power
of sale clause, the lender needs to take you to
court in order to foreclose on your property.
Judicial foreclosure varies from state to state, but
in general, after the court declares a foreclosure,
your home will be auctioned off to the highest
bidder. You can still save your home by paying off
your past due payments, as well as other costs that
the lender incurred, before the court gives the
lender approval to foreclose.
Contents below from Alabama State Official Site
(Section 11-99A-21)
If the owner of any land within the district
fails to pay an assessment when due, time being of
the essence, the board may commence proceedings to
foreclose on the land as follows:
(1) The board shall send a letter, certified
mail, return receipt requested, United States first
class mail to the last known address of the owner.
The address of the owner as shown in the tax
assessment records of the tax assessor for the
county in which the property is located shall be
sufficient.
(2) The letter shall specify that if payment is
not made within 10 days of the date of the letter,
foreclosure proceedings may be commenced.
(3) Any late payment received within the 10-day
period will accrue a late fee of the greater of five
percent of the payment or fifty dollars ($50).
(4) If payment is not made within the 10-day
period, the entire assessment shall become
immediately due and payable, and the board may do
either of the following:
a. File a complaint in the circuit court for the
county in which the property is located requesting
that the property be foreclosed. Thirty days
following service of process, unless the entire
assessment is paid in the meantime, the court shall
enter a decree declaring that the property shall be
sold to the highest bidder.
b. Proceed to sell the property against which the
assessment is made to the highest bidder for cash.
c. In either case, the sale shall be made after
first giving public notice of the date and time of
the sale and the purpose for which the same is made,
together with a description of the property to be
sold; and that the proceeds from the sale shall
first be applied to the amount of the assessment and
all accrued interest thereon, plus penalties
specified in subdivision (3), plus the attorneys'
fees and other expenses incurred by the board in the
foreclosure and suit.
(5) If the agent concludes that no bidders are
present or that all bids are insufficient, the agent
may announce that the auction shall be continued to
a later date to be announced by public notice.
(6) Upon declaring the highest bidder and receipt
of the purchase price, an agent of the board shall
make out a foreclosure deed to the highest bidder.
The owner of the property shall have no right of
redemption unless otherwise provided in the board's
proceedings with respect to the assessment.
(7) The purchase price shall be used first for
the payment of the assessment, then for the cost of
collection, suit, foreclosure, and deed preparation,
then for penalties, then for accrued interest and
interest until the next principal payment date of
bonds as provided in this chapter with respect to
prepayments of assessments, and then for the unpaid
principal amount of the assessment, and any
remaining portion shall be paid to the owner of the
land at the owner's last known address as shown in
the records of the tax assessor with respect to such
tract of land.
(8) The board may bid on any sale the same as any
other person, and may credit any portion of the
assessment and other costs as a part of its bid.
(9) If the highest amount bid and accepted is
insufficient to pay the entire assessment, the board
and holders of the bonds shall have no further claim
against the owner of the land assessed by virtue of
the assessment.
(10) Any foreclosure deed shall make no warranty
with respect to the title to the land other than as
expressly stated therein.
(11) At any point in the foreclosure proceedings,
until a bid is accepted, the board may waive the
default on terms as it may consider proper and
reinstate the assessment, subject to any contrary
terms of the board's proceedings with respect to the
bonds.
(Act 99-446, p. 1013, §1.)
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