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 Tuscumbia, 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 (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 borrower for the balance, if the sale nets less than the amount due. You should consult a lawyer in Tuscumbia, Alabama to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Alabama?
First, and most importantly, you should not ignore the issue. Failing to respond to foreclosure calls from your lender will not make a problem go away. You should stay in touch, and be straightforward with, your creditor as much as possible. It is essential to remember that banks don't really want to own homes in Tuscumbia. 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 enable you to keep paying them in the long run.
If you believe that foreclosure is imminent, there are some other options. For example, you might be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can get, 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. 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.
How Can A Tuscumbia, Alabama Attorney Help?
If you are faced with the possibility of foreclosure in Tuscumbia, Alabama, an attorney might be able to help. At the very least, he or she can advise you of your legal options.