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Foreclosure (Alabama/Florida)

Last Reviewed: November 2019

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

Print State Considerations (Alabama)

Foreclosure: State Considerations (Alabama)

Alabama has two methods of foreclosure for mortgages and land contracts:  Judicial Foreclosure and Foreclosure by Advertisement.   Preliminarily a party should order a title commitment policy prior to commencing a foreclosure action to ensure the position of the interest and to determine any tax issues or clouds on title. 

Sale by Judicial Action

A judicial foreclosure permits the mortgagee to resolve any conflicting claims concerning the mortgage if subsequent lienholders claim priority or contest other issues. The moving party initiates the process by filing a complaint to foreclose a mortgage asserting a default in the payment of the promissory note, the remedy of which is the foreclosure of the property. After service of process of the borrower the final step requires the attorney for the holder seeking an order authorizing sale. No less than fourteen days before the date set for the hearing, the holder or under this section for a residential property shall cause a notice of hearing to be posted in a conspicuous place on the property that is the subject of the sale.  Unless an answer is filed and after satisfying all the requirements, a Judgment and Order authorizing the sale may be entered.   

Sale by Advertisement

Notice of Sale

In a non-judicial sale the lender must cause notice to be given by publishing the time, place, terms of sale, and description of the property in a newspaper of general circulation within the county where the property is located once a week for a period of three consecutive weeks.   Even if the mortgage does not contain a power of sale clause they lender may sell the property for cash at the courthouse door of the county where the property is situated, to the highest bidder, after notice of the time, place, terms, and purpose of such sale has been given by four consecutive weekly insertions of such notice in some newspaper published in the county where the property is located.

Federal and State Tax Liens

Federal tax liens filed after the mortgage is recorded requires that special notice be given to the IRS before a foreclosure can extinguish a tax lien. To extinguish a federal lien, the notice of sale must be sent no more than 20 days before the foreclosure sale.  The IRS must be served via personal service or certified mail at least 25 days before the sale. IRC 7425(c)(1). If the lien is recorded within 30 days of the sale, the lien has no effect and may be extinguished pursuant to local law. IRC 7425(b)(2). 

Redemption

There is a 180 day redemption period after the sale of the property.  The amount of the debt plus interest must be remitted.

Post Sale Recovery

The lender has the option to file a suit for deficiency in Alabama.  This is a separate suit from the foreclosure suit.

Print State Considerations (Florida)

Foreclosure: State Considerations (Florida)

Florida has one method of foreclosure for mortgages and land contracts:  Judicial Foreclosure.   Preliminarily a party should order a title commitment policy prior to commencing a foreclosure action to ensure the position of the interest and to determine any tax issues or clouds on title.    

Sale by Judicial Action
A judicial foreclosure permits the mortgagee to resolve any conflicting claims concerning the mortgage if subsequent lienholders claim priority or contest other issues. The moving party initiates the process by filing a complaint to foreclose a mortgage asserting a default in the payment of the promissory note, the remedy of which is the foreclosure of the property. The complaint must contain affirmative allegations expressly made by the plaintiff at the time the proceeding is commenced that the plaintiff is the holder of the original note secured by the mortgage; or allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note.

If a plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the complaint shall describe the authority of the plaintiff and identify, with specificity, the document that grants the plaintiff the authority to act on behalf of the person entitled to enforce the note.  If the plaintiff is in possession of the original promissory note, the plaintiff must file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified.

Federal and State Tax Liens
Federal tax liens filed after the mortgage is recorded requires that special notice be given to the IRS before a foreclosure can extinguish a tax lien. To extinguish a federal lien, the notice of sale must be sent no more than 20 days before the foreclosure sale.  The IRS must be served via personal service or certified mail at least 25 days before the sale. IRC 7425(c)(1). If the lien is recorded within 30 days of the sale, the lien has no effect and may be extinguished pursuant to local law. IRC 7425(b)(2).  

The complaint must be served on the Attorney General of the State of Florida as a party to the original proceedings to address any State liens.

Notice
If a publication is required then it must be published in a newspaper that has been entered as a periodical matter at a post office in the county in which the newspaper is published, is published a minimum of 5 days a week and has been in existence and published a minimum of 5 days a week, exclusive of legal holidays, for 1 year.

Sale
The real estate shall be sold at a sale no sooner than 20 days and no longer than 35 days after a judgment is entered.  After the sale and entry of a final judgment there is no right of redemption.

Post Sale Recovery
The Court has the discretion to award a deficiency.  The amount of the deficiency may not exceed the difference between the judgment amount, or in the case of a short sale, the outstanding debt, and the fair market value of the property on the date of sale. In uncontested mortgage foreclosure proceedings in which the mortgagee waives the right to recoup any deficiency judgment, the court shall enter final judgment within 90 days from the date of the close of pleadings.  If contested the attorney fees cannot exceed 3 percent of the principal amount owed at the time of filing the complaint

Print Laws & Regulations

Foreclosure (Alabama/Florida): Laws & Regulations

Laws & Regulations (Alabama)

Laws & Regulations (Florida)

 

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