Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Alaska Foreclosure Law Summary
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of
Trust, Mortgage
- Timeline: Varies by Process; Typically 90
days
- Right of Redemption: Varies by Process
- Deficiency Judgments Allowed: Varies by
Process
In Alaska, lenders may
foreclose on deeds of trusts or mortgages in default
using either a judicial or non-judicial foreclosure
process.
Judicial Foreclosure
The judicial process of foreclosure, which involves
filing a lawsuit to obtain a court order to
foreclose, has been instituted more since the late
1980's, when lenders found that they were
foreclosing on residential property worth
substantially less than the amount owed. Generally,
after the court declares a foreclosure, your home
will be auctioned off to the highest bidder.
In the case of judicial foreclosure, the process is
carried out according to the rules of equity,
deficiency suits are permitted and the borrower has
no rights of redemption.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed
of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the
balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the
property may be executed by the lender or their
representative, typically referred to as the
trustee. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of
sale clause and specifies the time, place and terms
of sale, then the specified procedure must be
followed, provided it meets the minimum protection
laws set forth by the State of Alaska. Otherwise,
the non-judicial power of sale foreclosure is
carried out in the following three phases:
The trustee must record a notice of default
in the office of the recorder of the recording
district in which the property is located not
less than thirty (30) days after the default and
not less than three (3) months before the sale.
Said notice of default must state the name of
the borrower, the book and page where the deed
is recorded and it must describe the property,
the borrower’s default, the amount the borrower
owes, and the trustee’s desire to sell. It must
also state the date, time and place of the sale.
Within ten (10) days after recording the notice
of default, the trustee must mail a copy of the
same by certified mail to the last know address
of (1) the borrower, and (2) any person whose
claim or lien on the property appears of record
or is known to the lender of trustee and (3) any
occupant. The trustee may have the notice
delivered personally instead of sending it by
certified mail.
Any time before the sale, the borrower may
cure the default and stop the sale by paying a
sum equal to the missed payments plus attorney’s
fees. The lender may not require the borrower to
pay off the entire remaining principal balance
of the loan to cure the default, just the missed
payments and attorney’s fees. If the lender has
recorded a notice of default two or more times,
then the Alaska statutes provide that the lender
can refuse to accept the borrower’s monies for
the missed payments and attorney’s fees and
proceed with the foreclosure sale instead.
The sale must be made at a public auction
held at the front door of a courthouse of the
superior court in the judicial district where
the property is located. The trustee must sell
to the highest and best bidder and the lender
may bid at auction.
The trustee may postpone sale of all or any
portion of the property by delivering to the
person conducting the sale a written and signed
request for the postponement to a stated date
and hour. The person conducting the sale shall
publicly announce the postponement to the stated
date and hour at the time and place originally
fixed for the sale. This procedure shall be
followed in any succeeding postponement.
When this type of foreclosure process is used,
the borrower has a right to redeem the property and
deficiency suits are not allowed.
