Foreclosure is the legal procedure 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 Tuscaloosa, 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 gather 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 good effort to get a reasonable price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In numerous states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the debtor for the balance, if the sale nets less than the amount due. You should consult a attorney in Tuscaloosa, Alabama to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.
How Can I Avoid Foreclosure in Alabama?
First, and most importantly, you should not dismiss the issue. Failing to respond to foreclosure calls from your lender will not make a issue go away. You should stay in touch, and be straightforward with, your creditor as much as possible. It is important to remember that banks don't really want to own homes in Tuscaloosa. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will allow you to keep paying them in the long run.
If you believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. There is also the option of a "short refinance," which forgives a considerable portion of your mortgage debt, and refinances the rest.
How Can A Tuscaloosa, Alabama Attorney Help?
If you think foreclosure is imminent, a good Tuscaloosa, Alabama lawyer may be your best hope for staving it off. Even if keeping the house proves impossible, a good attorney can minimize the financial effects.