Alabama is one of the fastest growing states in the country. As a result, Alabama's home loan industry is starting to see an upward trend in home loan applications. This should help an industry that features the normal selection of home loan products.
These home loan products are protected by a number of foreclosure procedures that generally benefit the lender. However, borrowers still have many privileges that are rarely seen elsewhere in the country. As a result, anyone who is interested in purchasing a foreclosed home in Alabama should learn how the foreclosure process works in Alabama.
Here is some background information about Alabama's median home values, population trends and mortgage industry that can help readers learn more about the foreclosure process in Alabama.
Alabama's median home values tend to be significantly lower than the February 2010 national median home price of $190,000. To see why this is true, here are the February 2010 median home values for single-family homes in three of Alabama's well-known cities:
There are two reasons why Alabama's median home values tend to be much lower than the national median home price:
Birmingham has seen an increase in its per capita income. This is the case because the publishing, biotech and health care industries have made huge investments in the area. Furthermore, residents also enjoy a lower cost of living and lower taxes.
Mobile's economy is diverse. It features many employers who conduct business in the aerospace, retail, construction, manufacturing and shipping industries. However, Mobile also has one of the highest poverty rates in the nation at 17.6%. This statistic has kept home values down and Mobile very vulnerable to foreclosures. (Source: http://factfinder.census.gov/.)
As the state capital, Montgomery maintains a diversified economy that is heavily reliant upon government spending. Furthermore, the military’s presence at Maxwell-Gunter Air force Base and university-level research projects give the city one of the highest per capita incomes in the state.
Alabaster is a suburb of Birmingham. It has seen amazing growth over the last decade because it enjoys one of the lowest tax rates in the nation. Furthermore, its great quality of life and wide open spaces has become just the thing for Birmingham residents who want to take live in a more relaxed setting. (Source: http://cityofalabaster.com/Default.asp?ID=99.)
Pelham has grown steadily over the past five years because it has developed its travel and tourism industry that takes advantage of its open spaces and proximity to famous golf courses. Furthermore, Pelham has also seen many retirees flock to the area. This true because the city enjoys a very low crime rate, clean air and a very low cost of living. (Source: http://www.pelhamonline.com/Default.asp?ID=176.)
Mobile's manufacturing and shipping industries have seen new life as foreign investors have flocked to take advantage of the area's port and shipping lanes. This has attracted many new residents to the area who wish to take advantage of the new job opportunities that have opened up as a result.
Alabama offers the usual range of home loan products, including:
These loan products are recognized as being either mortgages or deeds of trust. However, for practical purposes, one can interchange the name of the loan product without having to worry about its legal ramifications. In addition, most modern mortgages have a Power of Sale clause that makes foreclosing on a property easier. Furthermore, most mortgages in Alabama have full recourse privileges.
However, borrowers who have defaulted on their mortgages have up to one year to attempt to redeem their homes. This potentially lengthy redemption period makes obtaining a deficiency judgment difficult. It also makes the foreclosure process somewhat more difficult to execute in Alabama.
Alabama recognizes both judicial and non-judicial foreclosure processes. However, as a general rule, most foreclosures in Alabama use non-judicial foreclosure procedures. This is the case because most modern mortgage instruments issued in Alabama contain a Power of Sale clause that makes it easier to foreclose on a defaulted property.
Here is a brief overview of how each procedure works in Alabama:
Here is how the judicial foreclosure procedure works in Alabama:
The judicial foreclosure procedure works in Alabama only if there is no verifiable "Power of Sale" clause in the original loan provisions. If this is the case, here are the steps that the lender must go through to use the judicial foreclosure procedure:
Here is how the non-judicial foreclosure procedure works in Alabama:
Here are those few modifications: