Thinking of purchasing a home at a foreclosure sale? Make sure that you’re up to date with the new foreclosure law in Alabama before purchasing.
Right of Redemption After Foreclosure in Alabama
Former owners are given the opportunity to repurchase their home after a foreclosure sale. This is called the right of redemption. To redeem the property, former owners must pay the Purchaser the purchase price paid, plus other charges such as:
- Interest
- Taxes paid by buyer
- All insurance premiums buyer has paid
- Any valid lien the buyer has paid
Because it is difficult for a former owner to get the money after the sale, redemption is rare.
New Redemption Law
Alabama law now provides a 180-day redemption period after the foreclosure sale if the mortgage was executed after January 1, 2016. Before this law change, home owners had the opportunity to redeem their home within one year of the foreclosure sale. In order to preserve the 180-day redemption period, the foreclosing party must mail a notice of redemption at least 30 days before the sale. If a notice of redemption is not provided then the prior owner will have 2 years to redeem the property.
Losing Redemption Rights
The foreclosed party can lose their redemption rights if they don’t exit the property ten days after the purchaser delivers a written demand for possession.
If the redeeming party pays the correct amount within the redemption period, then the purchaser must sign over the property to that party. If the purchaser fails or refuses to do so, the redeeming party has the right to file a lawsuit to enforce the right of redemption.
Do you have more questions about the new foreclosure laws? The lawyers at Stanko & Senter will happily answer your questions today!
