Carmel Estates, the more open the foreclosure is to attack. Some Holders may credit bid a lower amount to increase any potential recovery by deficiency, but the lower the credit bid below both the amount of indebtedness or the appraised value, keeping in view the ranges approved in Mt. Our experience indicates that the typical practice by Holders is to credit bid the full amount of the lesser of either the recently appraised value or the indebtedness. Carmel Estates, the Alabama Supreme Court held that a foreclosure credit bid by the lender which was 80% of the appraised value of the real property and 77% of the indebtedness was not so low as to shock the conscience of the court to raise a presumption of fraud, trickery, unfairness or culpable mismanagement.

The Alabama Supreme Court observes the general rule that 'where the price realized at the foreclosure sale is so inadequate as to shock the conscience, it may itself raise a presumption of fraud, trickery, unfairness, or culpable mismanagement and therefore be sufficient ground for setting the sale aside.' Mt. The amount of the credit bid is generally within the discretion of the lender or servicer (collectively, the 'Holder'). A foreclosure sale in Alabama is held at the main door of the courthouse in the county (and division, if applicable) where the property is located between the hours of 11 a.m. Direct notice to the debtor is not required by Alabama law, though it is standard practice to provide it.

The Alabama foreclosure statutes require publication of the notice of foreclosure once a week for three weeks in a newspaper published in the county where the real property is located. It is important to verify that the power of sale is contained in the mortgage. The right of redemption is, in our experience, often a topic of discussion but rarely exercised.Īlabama law provides for nonjudicial foreclosure by the power of sale clause contained within a mortgage. The ease of foreclosure is balanced by a one-year statutory right of redemption in favor or certain parties. Alabama law provides a relatively simple and lender friendly foreclosure procedure.

Mass effect redemption summary