What is Foreclosure in Montgomery, Alabama?
Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (normally a house) that secured the loan. This is done when the Montgomery, Alabama debtor has repeatedly failed to make their payments. Foreclosure normally requires the house to be sold at an auction. Normally, banks want to rid themselves of the property as soon as they can, in order to collect as much money as possible.
In all states in the U.S., including Alabama, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a reasonable effort to get a decent price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an attorney in Montgomery, Alabama to see if this is the case. However, this normally doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Alabama?
First and foremost, you should not ignore the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this might seem, you should stay in contact with your creditor, and be straightforward with them. One should remember that banks typically don't want to take your house in Montgomery. 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 straightforward with them about your financial situation, they are likely to make reasonable accommodations to prevent you from defaulting.
If you can't work anything out with your lender, or have become completely unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt might be forgiven. A "short refinance" might also be an option in some cases. This allows you to have some portion of the debt forgiven, while refinancing the rest.
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How Can A Montgomery, Alabama Attorney Help?
If you are facing foreclosure, a good Montgomery, Alabama real estate attorney can help. While keeping your home might not always be possible, a lawyer can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.