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Judicial Foreclosure Available: Yes
Non judicial Foreclosure Available: Yes
Alabama allows foreclosure in one of three ways:
Foreclosure by filing a lawsuit seeking a court order to foreclose is not common. Methods two and three are more commonly used.
Preliminary Notices
Advertising
The sale may not take place until 30 days after publishing an advance notice of the time, place and terms of the sale once a week for four consecutive weeks. The notice must be published in the county in which the property is located.
If the mortgage or deed of trust contains a power of sale clause and specifies the time, place and manner of the foreclosure sale, then that procedure must be followed.
However, if the mortgage or deed of trust with a power of sale clause is silent as to the place of terms of the sale, or as to the type of notice of the sale, then a foreclosure sale may be made at the courthouse door of the country where the property is located, after a breach of the conditions or requirements of the mortgage, or deed of trust, by selling for cash to the highest bidder. However, in the case of a sale under a mortgagee or deed of trust with a power of sale clause, a foreclosure deed conveys the title.
If the mortgage or deed of trust lacks a power of sale clause and the lender chooses not to file a lawsuit to foreclose, then the lender may foreclose by selling the property for cash to the highest bidder at the courthouse door in the county where the property is located. Advance notice of the time, place, terms and purpose of the sale must be given by publishing an ad once a week for four consecutive weeks in a newspaper in the county where the property is located.
The lender may sue to foreclose the mortgage without filing a suit to obtain a deficiency judgment. Alternatively, the lender may sue to foreclose, and then sue for any resulting deficiency. It is the lender’s choice.
The borrower has a right to redeem within one year after the foreclosure. Anyone who wants to redeem should obtain a statement of the price paid for the property at the foreclosure sale from whoever bought the property at the foreclosure sale. The borrower can then redeem the property by paying the purchase price, taxes, insurance, improvements and ten percent interests on the price and all other the legitimate charges to the purchaser. If necessary, the borrower can sue in the circuit court to redeem the property.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Alaska offers two ways to borrow money against real estate, a true mortgage, and a deed of trust. The true mortgage may be foreclosed in Superior Court, according to the rules of equity. The deed of trust names the trustee who will oversee the foreclosure sale by recording and posting a notice of sale and arranging an auction to the highest bidder. Alaska law provides a procedure to appoint a substitute trustee by recording a proper notice of the appointment.
Non-judicial deed of trust sale.
The deed of trust must be foreclosed according to its own terms, provided those terms are consistent with the minimum protections of Alaska ’s laws.
Recording
Not less than 30 days after the default and not less than three months before the sale, the trust will record notice of default stating the name of the borrower and the book and page where the trust deed is recorded. It must describe the property, the borrower’s default, the amount the borrower owes, and the trustee’s desire to sell. It must give the date, time and place of the sale.
Within ten days after recording the notice of default, the trustee must mail a copy of the same by certified mail to the last know address of (1) the borrower, and (2) any person whose claim or lien on the property appears of record or is known to the lender of trustee and (3) any occupant. The trustee may have the notice delivered personally instead of sending it by certified mail.
Any time before the sale, the borrower may cure the default and stop the sale by paying a sum equal to the missed payments plus attorney’s fees. The lender may not require the borrower to pay off the entire remaining principal balance of the loan to cure the default, just the missed payments and attorney’s fees. If the lender has recorded a notice of default two or more times, then the Alaska statutes provide that the lender can refuse to accept the borrower’s monies for the missed payments and attorney’s fees and proceed with the foreclosure sale instead.
Place of Sale
The front door of the Superior Court for the judicial district where the property is located, unless the deed of trust specifies another location.
The trustee can conduct the auction or bring in an auctioneer to call out the sale.
The trustee can postpone the sale by giving the person who conducts the sale a signed and written postponement request moving the foreclosure to a different time and place, which must be publicly announced at the time and place originally fixed for the sale.
The trustee must sell to the highest and best bidder. The lender may bid at auction. The trustee’s deed must give the book and page where both the original deed trust and the default notice were recorded. It must state the notice of default was property mailed. It must give the time, place and manner in which the foreclosure sale was conducted, and the amount paid for the property at foreclosure. After the sale, the trustee must record an affidavit that the notice of default was property mailed.
If the lender forecloses by means of an out-of-court foreclosure sale under a deed of trust, then the borrower has the right to redeem the property. However, the borrower does have the right to redeem if the sale was the result of a lawsuit and a court order commanding the sale.
Judicial foreclosure permits a deficiency suit. However, if the lender forecloses through an out-of-court foreclosure sale under the deed of trust, then the lender may not sue for a deficiency judgment afterward.
Judicial foreclosure available: Yes
Non-judicial foreclosure available: Yes
A trustee may conduct the foreclosure sale out of court under a power of sale clause if the borrower defaults on the loan. Alternatively, a trustee (or the lender) may sue to foreclose. A trustee may also sue the borrower for physical abuse to the property, waste, or other impairment of the security, but only so long as the borrower was in possession or control of the property when the damage was done. The trustee cannot conduct a foreclosure sale under the power of sale clause until a lawsuit to foreclose is dismissed. Under Arizona law, a bank, trust company, Savings & Loan or other institutional lender can be a trustee. Arizona licensed attorneys, real estate brokers, and insurance agents can also be trustees. The lender for any reason may appoint a substitute trustee if they record a Notice of Substitution of Trustee and mail a copy to the borrower. A trustee may resign by recording a Notice of Resignation of Trustee.
Contents
The trustee will give written notice of the time and place of sale including legal description of the property, by each of several methods.
The trustee must record a notice of the sale in the county recorder’s office in the county where the property is located.
Once a week for four consecutive weeks, the notice must appear in a newspaper in the county where the property is located. The last notice must be published not less than ten days prior to the date of the sale.
(1) If it can be done without a breach of the peace, the trustee can post the notice at least 20 days prior to the date of the sale, in some conspicuous place on the property to be sold. (2) He or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.
The trustee or lender must mail, within five days after recording the notice of sale, by certified mail, a copy of any notice of sale to each of the persons who are parties to the trust deed except the trustee. It must be addressed to the mailing address specific in the trust deed. The notice must set for the nature of the borrower’s breach or nonperformance under the trust deed. In addition, any person will be entitled to receive a copy of the trustee’s foreclosure notice if such a person records a statutory Request for Notice form.
For a fee up to $20, the trustee can provide information on the unpaid balance, the name and address of the owner, the date the trustee’s notice was recorded and a list of encumbrances. A trustee must honor a written request, and may honor an oral request.
Time and Place
The time and place of the foreclosure must be designated in the notice of sale.
The trustee or the trustee’s agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a "credit bid," which means to cancel out some part (or all) of the money the borrower owed the lender on the lean, instead of paying cash. A successful high bidder must pay the bid price by 5p.m. of the day after the bid, other than a Saturday or legal holiday. Every bid is an irrevocable offer until the sale is completed, which happens when the bidder pays the bid price to the trustee’s satisfaction. If the high bidder fails to make the payment b 5:00 p.m. , the day after being notified of the option to buy, then the trustee may postpone the sale.
The trustee may postpone the sale to another time, or another place, by giving notice of the new date, time and place by public declaration at the last place and time the property was offered for sale. No other notice is required. A trustee may also, by written agreement, extend the time for a buyer to come up with the payment.
The sale proceeds will go to the payment of the obligations secured by the trust deed that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustee’s deed, which constitutes conclusive evidence that the trustee conducted the foreclosure sale property.
An Arizona deed of trust permits the real estate that is the collateral for a loan to be sold at a foreclosure sale by a trustee. The proceeds of the sale will be paid to the lender, or the lender can take title to the property and cancel out the debt in exchange for the deed, called a "credit bid." Under a new Arizona law, a lender may not bring a subsequent deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. In foreclosures against other types of property, a deficiency is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within 90 days of the power of sale foreclosure.
Arizona does not recognize a subsequent right of redemption on foreclosure sales.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Under Arkansas law, a residential real property mortgage held by a bank, savings and loan or mortgage company may be foreclosed under a power of sale clause in the mortgage. Agricultural real property or construction loans operate by different rules.
Preliminary Notice
Contents of Notice
The Notice of default and Intention to sell must name the deed of trust parties, give recordings information, describe the default and the amount due on the loan and state the trustee’s or lender’s intention to undertake a foreclosure sale. The notice must include in conspicuous type the following warning:
The notice of default and intention to sell must be published once a week for four consecutive weeks prior to the date of the sale in a newspaper of general circulation in the county where the property is located. The final publication must be no more than ten days before the sale.
The notice must be mailed to the borrower by certified mail to the last address the lender knows of writing ten days after recording the notice. This includes any borrower of record or of whom the lender has actual notice. The notice must also be mailed to anyone who records a Request for Notice that specifically described the mortgagee including its recording information.
The lender must record a copy of the Notice of Default and Intention to Sell.
An appraisement of the property must be made before foreclosure day. The justice of the peace for the country in which the property is located must appoint three disinterested householders of the county where the property. The appraisers must take an oath that they will ‘well and truly view’ and appraise the property that may be shown to them. The appraisers must then view and appraise the property, and then all or any two of them must write an appraisal report and deliver the same to the person holding the foreclosure sale. The person conducting the sale must make it available to any interested party. For their services, the appraisers are paid $1 which comes from the proceeds of the foreclosure.
In any foreclosure under a mortgage or deed of trust in Arkansas , the property must sell for not less than two-thirds of the appraised value. If it does not, then it may be offered for sale within 12 months. The second sale may be to the highest bidder without reference to the appraisement.
The attorney for the mortgage or trustee may conduct the sale and act as the auctioneer. The foreclosure sale must take place at the time, date and place specified in the notice of Default and Intention to Sell, but the sale must be within certain limits.
It must be held between 9:00 a.m. and 4:00 p.m. on a week day, and not on a Saturday, Sunday or legal holiday.
It must be held at either the property being foreclosed on or the front door of the county courthouse where the property is located.
Any person including the mortgagee (lender) may bid at the sale, except the trustee, who may bid on the behalf of the beneficiary (lender) but not for himself or herself in deed of trust sales. The high bidder must pay the price bid at the time of sale, or within ten days. The lender may bid by canceling out what it is owed on the loan, including unpaid taxes, insurance, costs or sale and maintenance, but for cash for any higher price. The mortgage or trustee will execute and deliver a trustee’s deed to the high bid purchaser.
The sale may be postponed by public proclamation at the time, place and date last appointed for sale, up to seven days past the original date, but if for a longer time, then the whole notice procedure must be performed a second time, including the 60-day wait.
The purchaser may obtain possession once the deed is recorded. The occupant of the foreclosed premises becomes a tenant at sufferance against whom the purchases may use a writ of assistance, if necessary, to effect the eviction.
The proceeds of the sale will be applied as follows: (1) to pay the expenses of the sale; (2) to the debt owed; (3) to any recorded lien holders in the order of their priority, and; (4) to the original borrower.
Within ten days after the sale, the trustee or mortgagee will file an affidavit stating that a sale was made in accordance with the law, including the time, place and date of the sale, and the purchase price. A copy must be mailed to all persons entitled to receive notice of the foreclosure as described earlier.
In judicial foreclosure, a court decrees the amount of the indebtedness of the borrower and gives him or her a short time to pay. If the borrower fails to pay within that time, then the clerk of the court, as commissioner, advertises the property for sale. Sales of real property under court order will be on a credit of not less than three months not more than six months, or on installments to not more than four months credit overall. To secure payment, a lien will be retained on the property for its price. The purchaser must further give a bond with surety for the purchase price. The lender may bid at the sale. The lender can bid by crediting a portion (or all) of the amount the court found was owed to the lender against the sales price of the property purchased at the foreclosure sale. If the real estate does not sell for an amount equal to what’s due on the mortgage loan, then the lender may seize other property from the borrower as in an ordinary judgment.
The lender may sue the borrower for a deficiency within 12 months of a power of sale clause foreclosure. The lender may sue for (1) the difference between the foreclosure sale price and the balance due on the loan, or (2) the balance due on the loan minus the fair market value of the property, whichever is less.
When property is sold under a chancery court order, the borrower has one year from the date of the sale to redeem the property by payment of the amount for which the property was sold plus interest. However, the mortgagor may waive the right of redemption in a mortgage or deed of trust. In the case of a deed of trust or mortgagee’s sale under a power of sale clause, as described earlier, the borrower is not entitled to a right of redemption.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Non-judicial Sale Typically, a title insurance company is named as the trustee to arrange the sale of the real estate.
California is famous for its one-action rule, in which a lender must carefully elect one action to take against the borrower if the borrower defaults. If the lender forecloses the deed of trust out of court, the lender has chosen one action and may not bring a lawsuit to recover a deficiency, which would be a second action. If the lender chooses to sue the borrower and obtain both a foreclosure order, and if the proceeds of the judicial sale of the real estate are not sufficient to repay the loan balance, then a deficiency for the balance. Such a suit is permitted as the lender’s one action.
California lenders rarely elect judicial foreclosures.
Notice of Sale
The notice of sale must contain the name, street address and phone number of the trustee conducting the sale and the original trustor, along with a statement warning borrowers that their property is about to be lost at a public foreclosure sale and to contact a lawyer for an explanation.
The notice must give the street address. If no street address exists, the notice must state the address of the beneficiary from whom a set of directions to the property may be obtained I they are requested in writing within ten days from the first publications of the foreclosure notice.
A copy of the notice of sale must be posted in a conspicuous place on the property to be sold at least 20 days before the sale. If access to the property is restricted by means of a central guard gate, then the notice must be posted on the guard gate. A copy of the notice must be posted at one public place in the city where the property is to be sold (or judicial district in rural areas) at least 20 days before the sale.
A notice of trustee sale must be recorded at least 14 days before the sale.
A notice of trustee sale must be mailed by certified mail, return receipt requested, 20 days before the foreclosure sale to the borrower, to anyone who requests notice or recorded a request and to the trustors, beneficiaries or parties at interest.
Time
All sales under a power of sale in a deed o f trust will be made between the hours of 9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the notice of trustee sale.
The sale shall commence at the location specified in the notice of sale.
The sale must be made a public auction to the highest bidder. The trustee has the right to require every bidder to show evidence of ability to pay the full bid in cash, cashier’s check or certain bank checks. Each bid is by law an irrevocable offer to purchase. However, a higher bid cancels an earlier bid. It is unlawful and a criminal offense (a fine of $10,000 or up to one year in jail) to offer anyone consideration not to bid, or to fix or restrain the bidding process in any manner.
Sales may be postponed by announcement at the time and location specified for the intended sale. The borrower may postpone the sale in order to obtain cash, provided the written request for postponement identifies source from which the funds are to be obtained, and the postponement is only for one business day. The borrower may obtain one such postponement.
Debtors may reinstate up to five days before non-judicial foreclosure sale.
Junior lien holders may no longer redeem, so they may try to protect themselves by (1) advancing funds to bring the senior loan payments current, then foreclosing for the sums advanced; (2) bidding at the foreclosure sale so the price will be sufficient to pay off the senor and the junior liens; or (3) acquire the property by bidding at the foreclosure. If the debtor has a right to redeem and does so, the junior who purchased the home must be reimbursed. Junior liens do not reattach the property if a borrower redeems a senior lien whose foreclosure extinguished the junior. This helps borrowers by encouraging the junior to bid up to the property to fair market value at the foreclosure sale, or else lose out, giving borrowers closer to fair value at sale.
Lenders may not seek a deficiency judgment if (1) the foreclosure is non-judicial or if (2) foreclosure is on a purchase money obligation. The same rules do not apply to guarantee or later lien holders. The lenders may seize alternative collateral. If the lender forecloses by filing a lawsuit, then the lender can obtain both a foreclosure sale order and a judgment against the borrower for a deficiency after the court-ordered sale, but only for the difference between the judgment and the fair value of the security.
A borrower’s right to redemption is terminated when a deficiency judgment is waived or prohibited. When redemption is permitted, after judicial foreclosure, only the borrower can now redeem and junior lien holders or "redemptionors" may not. When the lender is permitted to seek a deficiency, elects to pursue a deficiency and forecloses judicially, the borrower may redeem 12 months after sale, but a full credit bid by the lender cuts it to 3 months.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Public Trustee - A Colorado Concept
In contrast to most states, where the trustee is usually the hired gun of the lender, Colorado has an impartial, accountable, "public trustee" appointed by the Governor for each county, who handles power of sale foreclosures on request. The public trustee may take only the compensation set by law. A private lender engages a public trustee by filing with the trustee two copies of a notice of election and demand for sale, the original note or a suitable bond and a mailing list of persons who must receive foreclosures notices.
Preliminary Notices
Advertising
A notice of sale stating the time and place of the foreclosure must be advertised in accordance with the terms of the deed of trust, but under Colorado law all deeds of trust must prescribe a weekly advertising period for the notice of sale in a newspaper of general circulation, of not less than four weeks.
The public trustee must record the lender’s notice of election and demand for sale.
The public trustee must mail, within ten days after the publication of the notice of election and demand for sale, a copy of the same and a notice of sale as published in the newspaper, to the borrower and any owner or claimant of record, at the address given in the recorded instrument. The public trustee must also mail, at lease 21 days before the foreclosure sale, a notice to the borrower describing how to redeem the property.
If the loan default is due to nonpayment, then the borrower can give notice of an intention to cure the default at least seven days before the foreclosure sale. The trustee must then, on request, investigate and tell the borrower the sum due on the loan. If, on or before 12:00 noon of the day before the date of the sale, the owners, parties or borrowers pay to the officer conducting the sale all delinquent principal and interest payments that are due as of the date of such payment, plus costs, expenses, late charges and attorney’s fees, but not future principal (since no extra debt is allowed due to acceleration) then the foreclosure must be stopped. This right my be exercised more than one time.
Date
The foreclosure sale must be held between 45 days and 60 days after the recording of the election and demand for sale.
The public trustee may conduct the sale at any door or entrance to a courthouse, not withstanding the deed of trust’s provisions, or the trustee may conduct the sale at the location specified in the deed of trust.
The trustee will pay an excess proceeds from the foreclosure sale to creditors in order of their priority, and the balance to the grantor, who has five years to claim it. Title is conveyed by deed to the higher bidder, who may be the lender.
The lender may sue for a deficiency.
The borrower has 75 days after the date of sale to redeem the premises by paying the public trustee the sum for which the property was sole, with interest. A variety of redemption periods exists for junior lien holders. Special rights exist in the case of agricultural borrowers.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Judicial foreclosure. Connecticut allows foreclosure by two strange judicial methods, strict foreclosure and decree of sale.
Connecticut is one of the few states that still uses strict foreclosure. In strict foreclosure, there is not foreclosure sale at all, not even at the courthouse steps. The lender must go to court and obtain a court order showing the borrower to be in default under the terms of the mortgage. At that point, title shifts to the lender. However, the borrower has a length of time set by the court to redeem the property. If the borrower fails to come up with the money during that time, then the borrower is forever barred from asserting a claim to the property and title becomes absolute in the lender. From that date, the lender has one month to record a certificate of foreclosure describing the premises, the mortgage, the foreclosure proceedings, and the date title became absolute. If the lender demands possession in the foreclosure suite, the court may issue an execution of ejectment against the person in possession of the property. Possession may also be obtained by peaceable entry, unless the mortgage says otherwise. The disadvantage to the borrower is that the lender obtains title to land that might be worth much more that what was owed on the original loan. This is fort of windfall profit for the lender.
Upon motion by any party, a court may allow a mortgage to be foreclosed by a decree of sale. In a decree of sale, the court will appoint a committee to sell the property. The court also sets the time and manner of the sale. The court further appoints three appraisers. The borrower may stop the proceedings at any time by paying the balance due on the loan. If not, the committee will make the sale. Afterwards, the sale will be ratified by the court which executes a deed to the purchaser. The grantee in the deed may obtain possession of the property by court order. A supplemental judgment can direct the distribution of the proceeds of the sale. The lender need only bring those proceeds to court which exceed the balance due on the loan, which included interests and costs.
If a residential borrower has lived in the home as a principal residence for at least two years, and the borrower (1) has not had a foreclosure action commenced against him or her in the past seven years, and (2) is unemployed or underemployed as defined by law, then the borrower can claim protection from foreclosure under Connecticut statues. Borrowers are underemployed or unemployed under Connecticut law if the aggregate earned income of all the homeowners of the real property during the year preceding the foreclosure was under $50,000 and less that 75 percent of the average aggregate annual income during the two years prior to one year before foreclosure.
A court may decide that borrowers are eligible for special protection after considering two criteria: (1) the likelihood the borrower will be able to make timely payments on a restructured mortgage by the time a restructuring period ends and the likelihood of a substantial prejudice to a lender or a subordinate lien holder due to the restructuring of the mortgage debt.
Protection from Foreclosure
Under Connecticut law borrowers can get two forms of protection: foreclosure is stopped during the restructuring period. Which may last up to six months, and borrowers can obtain court ordered restructuring of their mortgage so as to eliminate overdue payments.
The ceiling for restructured debt is either (1) the amount of the original debt or (2) 90 percent of the fair market value of the property as determined by an appraiser at the time of the restructure. No additional debt may be restructured. Missed payments can be added to the balance of the loan in a Connecticut restructure. However, the borrower must pay interest on the amount in arrears that is added to the loan. Interest accrues on any sums added to the old mortgage debt at the end of the restructuring period, which may be fixed or variable, depending on the original note. A composite rate must be used on fixed rate loans so that the restructured debt must pay current interest rates which the main part of the loan continues at its original rate. Such composite rates are not necessary for variable interest rate loans.
The strict foreclosure proceeding does not include an action against the borrower for payment, but the lender can sue the borrower directly. In an independent action brought prior to or during the strict foreclosure proceeding. Once the borrower’s time limit to pay the balance due on the loan expires, the lender obtains title to the property. If the property is worth more than the balance owed on the loan, the lender cannot sue for a deficiency. Please not, the lender receives all the equity in the property without paying anything in this situation. In proceedings to foreclosure by sale rather than by strict foreclosure, additional proceedings to collect a debt from the borrower are stayed during the suit seeking a sale. If the proceeds of the sale exceed the appraised value of the property , but are not enough to pay the lender’s past due loan balance, then a deficiency judgment may be rendered against the borrower. If at the court-ordered sale, the property is sold for less than the appraised value, then no other proceedings to collect the debt from the borrower may be undertaken until one-half the difference between the debt and the appraised value is subtracted from what the borrower owes the lender.
Redemption is determined by the court in strict foreclosure. Redemption by a junior lien holder is subject to any prior liens.