Foreclosure is a creature of state law, and so the foreclosure process will vary state-by-state. According to the NATIONAL ASSOCIATION OF REALTORS®, there are two primary type of foreclosure: judicial foreclosure or non-judicial foreclosure.
A “judicial foreclosure” requires a court order in order to foreclosure. The lender must prove to the court that the borrower is in default and that the lender has the right to receive the property. The judicial foreclosure process has been at the heart of the recent so-called “foreclosure crisis”. Approximately 20 states only allow for judicial foreclosures; many states allow for both judicial and nonjudicial foreclosures.
A “nonjudicial foreclosure” usually involves a deed of trust and does not require a court order. Only a handful of states only allow nonjudicial foreclosures. In this type of foreclosure process, the trustee issues default notices to the borrower and if the borrower is unable to cure the default, then the trustee exercises a “power of sale” clause in the deed of trust and initiates the foreclosure process.
The Realty Trac website has created a chart identifying the foreclosure processes used in the various states. According to their website, the State of Alabama uses both judicial and nonjudicial foreclosure procedures. The Process Period takes between 49 and 74 days, and the Sale Publication takes 21 days. The Right of Redemption Period is 365 days and the sale is handled by a Trustee.
Click here to view the Foreclosure Laws and Procedures by State.
Source: NATIONAL ASSOCIATION OF REALTORS®
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Foreclosure is not an easy process to go through. So make sure to speak and deal with a loan servicer that has experience.