Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the Daphne, Alabama debtor has repeatedly failed to make their payments. Foreclosure usually requires the house to be sold at an auction. Usually, banks want to rid themselves of the property as soon as they can, in order to gather as much money as possible.
In all states in the United States, including Alabama, foreclosure by judicial sale is an option. This allows the sale to be done under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In some states, original mortgages are "non-recourse loans," meaning that the lender may only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a Daphne, Alabama attorney to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans that have been refinanced.
How Can I Avoid Foreclosure in Alabama?
Most importantly, you must not dismiss the problem. Doing so will not make it go away, and will probably make it worse. You should stay in close contact with your bank, and be honest with them. One should remember that banks generally don't want to take your house in Daphne. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are honest with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. A "short refinance" may also be an option in some cases. This allows you to have some part of the debt forgiven, while refinancing the rest.
How Can A Daphne, Alabama Attorney Help?
If you are worried about foreclosure, a good Daphne, Alabama real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.