Stopping or Reversing Foreclosures
What Should You Do If You Are Facing A Foreclosure Or Have Been Through A Foreclosure In Alabama? Read To Learn About Some Options You May Have….
Are you facing a foreclosure in Alabama?
[Breaking news -- wonderful opinion by Alabama Supreme Court that gives hope to many Alabama homeowners -- read about the required notice you must receive under most mortgages....]
Have you already been foreclosed upon and you are now facing an ejectment lawsuit to evict you from your home?
We want to give you a good overview of both of these so you can decide what is the right course of action to take.
We will discuss the aspects, or the stages, of foreclosure in Alabama. This will help to put some context on where you are in the process.
First Stage — Before The Foreclosure
In Alabama, a foreclosure first has to be triggered by sending you a letter telling you that the foreclosure will happen. This is because we are a “non judicial” foreclosure state — no lawsuit is required to foreclose, which makes Alabama much different than, for example, Florida which is a judicial foreclosure state.
Next, the foreclosure lawyer, on behalf of the mortgage company, will advertise the foreclosure for several weeks in your local paper. Normally that is the paper in your county, but if you live in Jefferson County it can, and usually is, a little read paper known as the Alabama Messenger.
This stage ends when the mortgage company has someone stand at the courthouse steps and auction off your home.
But before you get to that stage, discussed below, normally you are frantically trying to get a loan modification or otherwise stop the foreclosure.
The best suggestion we can give you is to carefully document everything that you do and that you are told by the mortgage company debt collectors and loss mitigation folks.
If you are in this stage, treat it very seriously. The mortgage company is likely driving towards a foreclosure. Many folks refuse to believe a foreclosure could actually happen.
They are normally quite surprised to find out it has.
The way the economics and risk factors are set up, the mortgage companies make more money when they foreclose. Don’t assume “the bank doesn’t want another home — they won’t foreclose” — the bank (mortgage company) most likely doesn’t even own your loan and it is not the one that will be stuck with an empty house after a foreclosure.
You will likely be getting advertisement letters related to the foreclosure — this is because the foreclosure has been advertised and companies (both legitimate and not so legitimate) can write to you in order to offer their services to you.
It is at this stage that you may want to look into suing the mortgage company if it has broken the law or the contract with you — the note or the mortgage. Often, when we sue a mortgage company before a foreclosure, it will not proceed with the foreclosure because it knows that doing so will only make things worse for it if it has been caught breaking the law.
But, if we don’t sue or file bankruptcy or otherwise stop the foreclosure, we end up in the Second Stage of an Alabama Foreclosure. How do we get there?
Usually by the mortgage company committing fraud in lying to you about the foreclosure date. They will tell you the foreclosure is being postponed while they review the same loan modification documents that you have sent in five separate times. They will tell you there is a new sale date because they have a super new program that will save your home.
While they are telling you this, they are preparing to go into the next stage which is when your home is actually sold at the courthouse steps. . . .
Second Stage — The Actual Foreclosure
An “auctioneer” will stand at the courthouse steps and do the actual sale. No judge is involved. No witnesses.
Just a guy hired by the mortgage company to read a few lines.
Normally, there is no one to bid on the property.
No one except the mortgage company or Fannie Mae.
So, unlike Florida where the foreclosure may take 12-36 months to complete, here it is completed in 5 minutes. Your home is sold.
The foreclosure lawyer will record the “Foreclosure Deed” in the probate court.
So, what happens next?
You’ll normally get a letter demanding that you leave your home within 10 days. You will be threatened with a lawsuit (called an “ejectment” lawsuit) to evict you from your home if you don’t voluntarily leave.
You will likely be offered a thousand or a few thousand bucks to leave — this is crudely called “Cash for Keys” by the mortgage companies.
At this stage, bankruptcy is no longer an option to stop the foreclosure. This is because the foreclosure has already happened. It is too late for this option.
And this is why, in part, the mortgage companies will lie about the foreclosure date — because that will prevent you from using bankruptcy as a defense to a foreclosure. We rarely advise using bankruptcy to stop a foreclosure, but it is an option.
If you don’t leave your home, then you will normally get served with a lawsuit. Never a pleasant event, but we can sometimes turn this unpleasant event into a positive thing. Sound odd?
Stick with me, and let’s walk into the third stage. . . .
Third Stage — The Ejectment Lawsuit
The foreclosure was threatened.
You did not leave your home because you thought there was fraud or you had some other reason for not leaving your home.
Now the mortgage company, or Fannie Mae, or whoever bought your home at the foreclosure sale, is suing you.
The lawsuit is called an “Ejectment” lawsuit because it asks the court to eject you, to evict you, from your own home. It will also ask for other items including damages but the main thing the mortgage company wants is to get you out of your home.
We see many mistakes made at this stage by Alabama consumers. We have a video, and a book which goes into details, on the Five Mistakes Alabama Consumers Make When Sued For Ejectment.
The biggest thing we can stress to you is to not give up hope! You may be able to fight back against this ejectment lawsuit.
You may be able to have a judge, for the very first time, take a look at the foreclosure. Was it done properly? Did the company that foreclosed against you have the right to foreclose?
Keep in mind you have a 30 day deadline from when you were served to file an answer, or you will normally face a default judgment. A default judgment is a real judgment and it normally ends with the sheriff dragging you and your possessions out of your home if you do not voluntarily leave.
So, what to do?
Understand when your deadline is to answer the ejectment lawsuit.
Understand your options by talking with a foreclosure defense lawyer.
Then make the best decision for you — that may be to stay and fight or it may be to leave. There are lots of factors to consider.
Can you afford your home?
Are you willing to spend money to fight for your home and your rights?
How strong are your claims against the mortgage company?
If you live in Alabama, we will be glad to discuss these with you in a face to face meeting. We normally set aside a good amount of time to go over all of the options.
If you are interested in talking with us, give us a call at 205-879-2447 or by filling out our online contact form and telling us how you would like us to respond — with an email or a phone call.
Whatever you do — and whichever route you take — we wish you the best of success.
Update on 12-26-11: We have now substantially completed our specialty website called Alabama Wrongful Foreclosure which is solely devoted to helping to provide you with information about foreclosures and how to stop and/or reverse wrongful foreclosures.
Here are the primary items of content that you might find useful:
- Facing Foreclosure?
- Already Foreclosed?
- Sued For Ejectment After a Foreclosure?
- List of Mortgage Companies and Foreclosure Lawyers Operating in Alabama
- Definitions of Terms Often Used in Foreclosure Context