Stages of Foreclosures in Alabama

What are the three stages of a foreclosure in Alabama?


Alabama is a non judicial foreclosure state which means that a foreclosure does not have to go through the court system. This is different from judicial foreclosure states such as Florida. So when someone in Alabama is facing foreclosure this can mean different things as even though we are a non judicial state, often times a lawsuit is the final stage of foreclosure in Alabama. We have written this article to give you an overview of these three typical stages in an Alabama foreclosure.

These are three main stages to a foreclosure in Alabama:

  1. Before the foreclosure sale
  2. After the foreclosure sale
  3. The ejectment lawsuit

Let’s look at these stages.

Stage One – Before the Foreclosure

This is the time when the mortgage company – normally the servicer – notifies the consumer that the loan is being accelerated and that a forclosure sale will occur in 30 or more days.

First, a “default letter” has to be sent which tells you:

  • What you are in default of (lack of payments, lack of insurance, etc)
  • What you must do to fix or “cure” the default
  • How long you have to cure the default (almost always 30 days)

If you don’t fix or cure the default in the time period allowed, then you will receive the “acceleration” letter which says:

  • The entire amount owed is due now — instead of being due over the next 25 years or so it is “accelerated” to be entirely due right now
  • Your home will be sold at a foreclosure sale on a specific date at the front entrance to the courthouse in the county where your home is located.

The foreclosure sale must be advertised in the proper paper in the county where the property is located – normally for three consecutive weeks.

During this stage the consumer is normally trying to do one of the following:

  • obtain a loan modification,
  • reinstate the loan,
  • obtain another loan,
  • seek advice from a bankruptcy lawyer on filing a chapter 13 bankruptcy to stop the foreclosure, or
  • contact a consumer protection attorney to see if they can sue the mortgage or servicing company for breaking the law which will have the effect of normally stopping the foreclosure sale.

A modification is a change in the terms of the loan. Perhaps the past due interest and principal will be put at the end of the loan. Or the interest rate will be modified. Or the mortgage company will accept partial payments. This is the area in which the most rampant fraud occurs as the mortgage company or servicer will often promise to modify the loan, the consumer will rely (believe) the lie and then be damaged when the foreclosure sale happens.

Reinstating the loan means to bring the loan current or to pay a portion of the alleged amount owed so that normal monthly payments are resumed and the foreclosure sale is cancelled. Again, we see lots of fraud in this area as mortgage companies and servicing companies will tell Alabama consumers that a payment of, for example, $5,000 will stop the foreclosure sale and then the next month normal payments will resume. Instead of honoring its promise, the company will take and cash the $5,000 and then foreclose anyway saying the $5,000 was not enough to bring the loan current.  We often see where many bogus charges and fees are put to artificially drive up the reinstatement amount.  This violates state and federal law.

Often consumers will try to obtain a new loan but this is difficult given the negative credit marks that are normally on the consumer’s credit reports due to the late mortgage payments.

Many consumers look to a bankruptcy attorney to see if filing a chapter 13 bankruptcy is a good option to stop the foreclosure sale. Chapter 13 can be effective at stopping a foreclosure, at least temporarily, but one must still address the underlying issues of illegal charges, fraudulent statements, improper notification of the foreclosure, etc. that we discuss in our article here on Wrongful Foreclosures In Alabama.

Finally, some consumers who are in Stage One seek information and advice from a consumer protection lawyer that has an understanding of how foreclosures work, particularly in the context of the new federal RESPA rules.

These rules put very strict requirements on  mortgage companies foreclosing — they must comply with all sorts of deadlines and offer you a number of “loss mitigation” options.  They rarely comply with these new rules that went into effect on January 10, 2014.

Whether you talk with us or another experienced consumer protection attorney, you can better understand if you have a valid lawsuit to file against the mortgage company or the servicing company. Along with the lawsuit, sometimes it is appropriate to file a Temporary Restraining Order (TRO) to get a judge to order the foreclosure sale to stop. Other times the mortgage companies figure out it would be foolish to go forward with the sale after we have filed a lawsuit against them.

Stage Two – After the Foreclosure

When the consumer is unable to stop the foreclosure sale, then it must occur on the advertised date. This seems obvious but sometimes the mortgage company will decide to do it on a different date and unless proper notice is given of this change, the sale may be considered an illegal sale. But assuming the foreclosure sale occurs on the day it is supposed to occur, what happens at the sale and what happens next?

The sale normally occurs at the courthouse or the more precisely on the courthouse steps outside the front entrance to the courthouse during specific hours. Whoever is the high bidder will be able to buy the property. Sometimes this can be investors but more often it is the company that claims to own your note right now.

The new owner will then record a foreclosure deed in the probate court of the county where your home is located.

Normally the day after the foreclosure sale a letter will be mailed to you (certified and regular) from the lawyer representing the new owner informing you of the sale and advising you to leave or vacate your home within 10 days. If you don’t leave within 10 days, you can lose your right of redemption (which means your right to buy back your property.

You will have a decision to make. Do you leave your home and preserve your right of redemption or do you stay in your home and force the new owner (normally your mortgage company) to sue you in what is known as an ejectment lawsuit (Stage Three below)?

This area (and all of the areas we mention in this article) should be evaluated with a lawyer you trust but here are some general considerations:

  • Do you want to stay in your home?
  • Do you have a legitimate lawsuit that you could file either directly or as a counterclaim to the ejectment suit that will be filed against you?
  • Who bought your home – the mortgage company or an independent person or company?
  • Are you prepared to fight or do you want this matter to end with you losing your home?

There are many other considerations based upon your unique circumstances that we can discuss but these will give you a sense of what you might should think about as you decide whether to leave your home or not. Also understand that whether you leave your home or not does not impact whether you owe a deficiency on the mortgage. A deficiency is where you owe more than what was recovered at the foreclosure sale.

Stage Three – The Ejectment Lawsuit

If your home was sold at the foreclosure sale and if you do not move out in ten days, you will often be sued by the alleged new owner of the property to evict you (or eject you) from the property. Often a request for any deficiency is made in the lawsuit as well as a request that the judge “declare” that you have lost your right of redemption.

As we have discussed in the context of a debt buyer lawsuit, you need to make sure you answer the complaint. Normally you will have 30 days to answer the lawsuit. Most people don’t answer and therefore a default judgment is entered against them which includes being ordered out of your home.

So answer the lawsuit. Some people feel comfortable doing this on their own – if you are in this category then the advantage is you will save money on legal fees but the disadvantage is you will not have the expertise of a litigation attorney. Keep in mind that judges will expect you to know the law if you are acting as your own attorney.

Others want to hire a lawyer. Keep in mind that some lawyers have never been in a courtroom. There is nothing wrong with this but you need to understand if the lawyer you are looking at has tried cases, taken depositions, handled appeals, etc in the civil context.

Regardless of how you respond to the suit, along with your answer you may want to consider filing counterclaims against the company suing you if it is the original mortgage company that foreclosed on you. We will often add, in our counterclaim, the servicing company and other companies that were involved in any fraud, breach of contract, negligence, etc. in handling the loan payments, inspection fees, etc.

There is power in being the defendant and filing a counterclaim. Think of it this way. The mortgage companies/servicers have lied to you. Broken the contract. Probably don’t even have the right to do anything with the loan as they don’t know who owns the loan. On top of this they threatened to foreclose. Not only did they threaten to foreclose but they actually had the audacity to sell your home on the courthouse steps to themselves. Then, to kick you while you are down, they threaten you with eviction. Then to top everything else, they sue you. Now you sue them. This gets rid of all of the bogus arguments that you are “sue happy” or looking for a reason to sue these guys. They have done all of this to you and now they sue? If you ever want a chance at justice and you have legitimate claims, you have to make those claims now in most cases.

Few other points – since the mortgage company sued you in Alabama, most judges will make their “corporate representative” come to Alabama to give a deposition. After all they chose to sue you here so they should have to come here. Being the defendant you can often keep the case in state court (where you were sued) rather than go to federal court. There are advantages and disadvantages of both courts but you do have some options as the defendant.


No matter what stage of foreclosure you are in you have options if the mortgage company or servicing company has violated the law. As we discuss on this website, you must do things:

  1. Gain knowledge of your rights; and
  2. Take action!

You are gaining the knowledge – now make sure you take action. You can meet with us (or any reputable consumer protection lawyer who litigates cases) for a consultation to learn how the law applies to your unique situation and what options you have.

We are here to help you if your home is in Alabama. You can contact us through our website form or you can call us directly at 205-879-2447. We have a receptionist standing by from 8 am to 8 pm to answer your call and transfer you to Randi who is our paralegal in charge of foreclosure defense intake. She will gather information from you and then we can meet at our office in Birmingham, Alabama, for a meeting to go over your rights. We have over a dozen conference rooms available so having a comfortable space to meet and spread out any documents is not a problem. You just need to take the first step by taking action and calling us or filling out the online form and we will get back with you very quickly.

Best wishes and we look forward to helping you continue to gain understanding about your rights with respect to foreclosures in Alabama.

John G. Watts

Birmingham, Alabama



  1. gloria mitchell says:

    To whom this concern: I’m trying to stop the eviction on my home and set up a work out plan to have my home reinstated to me. they foreclosed 8/24/12. I’m in this situation due to lack of business in the mortgage industry. I was a mortgage loan officer for over 20 years.I have lived in the home for 20 years. In 2009 New South Federal Savings Bank closed their doors. I was a commission employee so I did not receive any serverance pay. I did receive my 401k, which I took a penalty on to catch up the payments. I went on the be hired by Midtown mortgage company, this was a broker,but to a sudden lay off I had to go where I could continue getting income.
    Business there was slow due to what was going on with B P Oil and mortgage company getting strict with financing mortgage loan. I left April 2011 to look for better employment. I filed chapter 13 at that time to included the arrearge. Al of this was told to my lender Alabama Housing Finance Authority. They gave me no option when the government was putting all types of plan to help this was why I fled and it was accepted. I started with Nationstar mortgage 10/12 and they closed their doors to the mobile branch one month after I started. at 51 years of age it was hard to find something else, so I changed my career and I am now with Mobile County Public School. I notified the mortgage company and They ask for a lot of paper work, which I provided, but do the employment process with the school board I had to reccommend to the board for approval, which was going to happen 8/30/2012. I ask them to postpone until that and they did not want to work with me. I have worked all of my life, never been fired and never had a gap of employment unt the mortgage crisis came along. They would even give me a chance to do a quick sale, which the property had decreased from $98,000 to $75,000 is what two houses in my neighbor hood have up for sale.

    So I need help, I do not want to move and due to my credit being hit with the bankruptcy and foreclosure I can get a apartment.

    • JohnGWatts says:

      I’m sorry you are in this situation — I know it is very frustrating.

      Often the mortgage companies don’t act according to “common sense” as they often have different motivations than we would expect. Sometimes they make more money foreclosing on a house — even one that is “upside down” because someone else is going to pay the difference.

      Contact my office if you still have questions or need help — for some reason your comment was delayed so hopefully you have already been able to make the best decision for you.

      I hope all is going much better for you now….

      John Watts
      Birmingham, Alabama

  2. John Ryan says:

    Is a deed in lieu of foreclosure an option to get out of the property and not have it on your record?

    • JohnGWatts says:


      To some extent it is.

      All depends on what you mean by “record”….

      On credit reporting, it depends on what the mortgage company tells the credit reporting agencies. Often it is counted as a “foreclosure” but this needs to be spelled out in the written agreement if you want it to be different.

      As far as the probate court, there is no actual foreclosure so at least in Alabama there should not be anything saying foreclosure in the probate court. The “deed in lieu” will be in the probate court so someone could figure out that you were close to foreclosure but I think often this is better than having an actual foreclosure.

      Do be aware that there may be tax consequences to doing a deed in lieu and you need to make sure there is not going to be any money owed. Again, it comes down to making sure you fully understand what is in the written agreement.

      Best wishes and keep us posted if this is a good option for you.

      John Watts
      Birmingham, Alabama

  3. Susan Scoggins says:

    Listen I need some advise… I have gotten a decision of divorce back almost 2 years ago.. and my ex was suppose to comply… however, he did not and he had a contempt to appear in court last week… and in the meantime… I found out that the home we shared was going into foreclosure… and I want the home… however,from what I know… he left the home as of May… and his name was on the home… however, he has not paid me what is owed to me… Is there anyway I can obtain this home with a lien on it … until all is done through the courts… ? Do I have any positive options…

    • JohnGWatts says:


      You’ll have to get with your divorce attorney — I don’t know what your options are but I suspect that you can not place a lien on the house. The mortgage company, assuming all was done correctly, has a right to foreclose and get the property that is the security for the loan.

      But check with your divorce attorney and I hope you can get this straightened out asap.

      John Watts
      Birmingham, Alabama

  4. We are already in chapter 13. My husband is 73 yrs. I am seventy.We bought my brothers house when he died.My neice sold us the house for forty thousand dollars at four hundred a month at 5% interest. The house was in a great deal of repair.When we got it paid down to 12,ooo.We decided we needed a new heating and other repairs.thats went our bank turned us down and told us Wells fargo Finance was being given to people with less than perfect credit.We are on social security.togetheri think it was twenty three hundred a month and a house pyt. of 1,087 a month. They paid off our cars and old bills and gave us 40,000 cash.It did’t take long until we were making the house payments out of that money.the house payment took almost half our income.The house would pay of when he was 80yrs.I would be seventy Seven.He now has pulmory fibious lungs.there is nothing they can do for him except keep keep him on meds. Wells Fargo never did a apraisal on our husband make Three times more money in social sec.sec. The deed is recorded in my name only.The modifican they offered was only 150.oo less and said we should be happy with that.too late we figured out if he died. I could not afford the house. If i died during the fifteen years. He could not either. Yes, We were stupid. We rented a house and ours still insured at our propery. My Husband and I want to move back back becouse that was our home. My brother built it, My husband fixed it and we both loved it.Wells Fargo Financil-are cold and heartless!

    • JohnGWatts says:

      I’m sorry you are dealing with this Shirley.

      I’m a bit unclear if this house has been foreclosed or not.

      If you live in Alabama, give us a call at 205-879-2447 and my paralegal Randi will be glad to get the details from you so we can know if we can help you or not.

      Again I’m sorry you got caught up in this….

      John Watts
      Birmingham, Alabama

  5. Will Lawrence says:

    I have an investment property that I purchased several years ago with the intention of selling. I haven’t been able to sell it and have been renting it out. I am now without renters and the last renters did not pay rent for several months, left the house in shambles, and I lost my job and am not able to maintain the property anymore. The bank will be starting the foreclosure process soon. Can I just walk away? Since it is not my primary residence, what can I expect to happen as a result of the foreclosure? The only collateral is the house itself; my primary residence won’t be affected will it?

    • JohnGWatts says:


      I don’t know if you live in Alabama and what your specific details are but let me give you some general thoughts assuming you live in Alabama and the property is in Alabama.

      If you allow the foreclosure to occur, you may have to deal with a “deficiency” — we talk about that in this article:

      Basically a deficiency is when the property sales at foreclosure for less than what you owed on it.

      The opposite is when there is a surplus — the sale brings more than you owe. In that case you would get that surplus. This is rare but I’ve occasionally seen it happen.

      Here’s my suggestion — get with a foreclosure defense lawyer in your state and sit down with him or her to go over your options. It may be that your best option is to let the property go in a foreclosure sale. Or maybe it is bankruptcy (chapter 7) or it may be some other option.

      You are very smart to start asking questions now — get the information you need and then you can make the best decision. I know you know this — sometimes the best decision is unpleasant — it still is the best decision out of unpleasant choices….

      Best wishes!

      John Watts
      Birmingham, Alabama

  6. Brian says:

    I have been trying to sell my old home for over 4 years now in Blount County. I owe more than what the property appraises for now by about 20,000. Due to getting married and having children my family and I moved to another part of the state and my mother deeded her old home over to me and that is where my family and I live now. I also own some land that was deeded to me by family. I have tried very hard over the last 4 years to keep up with my mortgage and have never been late on a payment to this day but I see it coming, I can’t keep it up but maybe a couple more months. I have nearly depleted my savings just trying to keep from defaulting on that home. My wife and I have decided to make 2 more months payments and if we have no offers by then to start the forclosure process. Can the mortgage company come after the home that I own outright? How much deficiency could I be looking at? Is a balance forgiveness common? How long before I will be able to get an auto loan or things of that nature? Thank you

    • JohnGWatts says:


      I’m sorry you are in this situation.

      Here are some thoughts for you and you are also welcome to call my office at 205-879-2447. I apologize for just now getting to your comment — been out of town the last week or so.

      If the foreclosure happens, there could be a deficiency where the amount the property is sold for is less than what you owe.

      If there is a deficiency, ultimately you could be sued. If you were sued, and lost, then this could impact the property that you own outright.

      Often times at least the major banks (Bank of America, Chase, Citi Mortgage, Wells Fargo, etc) bid the exact amount that is owed so there is no deficiency but this does not always happen.

      If you do have a deficiency, it may be easier to pay it off or settle it than to keep going in the hole every month on a house you do not live in anymore. These are tough decisions that many people are facing in Alabama (and elsewhere) and there is no right answer but we want you to look at all of your options.

      As far as the damage to your credit report, a foreclosure is certainly bad. You have to balance this out with if you are able to get out from under the debt completely, how will this benefit your credit report? You won’t have as much debt.

      As I mentioned — many options and possibilities. Give us a call if you would like to chat about it.

      Best wishes

      John Watts
      Birmingham, Alabama

  7. Dave says:

    I filed Bankruptcy 13 last fall, and I started making my payments again. My income is not that much and I am feel I am not going to be able to continue my promise to the court in making my payments. Can the bank still foreclose on me under normal foreclosure laws in alabama or will it be tied up in court again.

    • JohnGWatts says:


      The Chapter 13 Bankruptcy will give you protection — what is called the automatic stay — but if you don’t make your payments either the case can be dismissed or the bank will request what is called a “Motion for Relief from Stay.”

      This is a request to have the automatic stay lifted or removed so that the bank can foreclose. They do need to follow normal Alabama law on the foreclosure process.

      I hope this has answered your question — if not check with your bankruptcy lawyer or leave a comment and I’ll try to answer it better.

      Thanks and best wishes.

      John Watts
      Birmingham, Alabama

  8. Dianna says:

    I don’t know where to start. we have a mortgage with GreenTree and we are 2 months behind. we filed chapter 13 and went through alot with Greentree trying to keep it in the bankruptcy. They through us out of bankruptcy and put the 2000.00 dollars we owed them in arrears. we got behind again becasue my husband is in construction and we just keep sinking. they put us in the paper with a notice, we cought up the payments they said it was never in foreclosure. they put us in the paper again. this time we were only a month and maybe a half behind. we received some kind of papers from an attorney asking us to answer if we are in default, but i don’t think we are because again it is only 2 months behind. we have never received forclosure notice and are billing statements never have what we owe on them. cant look them up on line becasue whenever we get more then a month behind they block it and it reads call jeff. and their phone number. we called jeff and he said that we need to get out and that they are sending our money back and to call money gram were we send it through because it should be because they are not going to except our payments. What should we do?

    • JohnGWatts says:


      If you are in Alabama, get with a foreclosure defense lawyer ASAP. You can call our office at 205-879-2447 or get with another lawyer but get with someone.

      Sounds like you are in foreclosure or have already been foreclosed. The next stage is being sued to be forced out of your home.

      So it is critical that you figure out:

      First, where am I in the process? What has happened and what is going to happen?

      Second, where do I go from here?

      You can’t figure out what to do without knowing exactly where you are right now. So that’s the first step.

      Sorry you are going through this stressful time — if we can help give my office a call at 205-879-2447. We represent homeowners all over the state from Mobile up to Huntsville.


      John Watts
      Birmingham, Alabama

      • Larry Fitzpatrick says:

        Hi, I just answered an eject meant letter for foreclosure, I would like to know the next step.

        • John Watts says:


          I’m not sure if you are saying you have been foreclosed or about to be. After a foreclosure, you will get a letter saying to leave your home in 10 days.

          If you are in Alabama, it may be easier to call my office and speak to my paralegal Randi Curb (205-879-2447) so we can see exactly where you are and what your next steps can be.

          Look forward to hearing from you thanks!

          John Watts

  9. Sherri says:

    I have a question on behalf of a friend. It is a very complex situation. His wife died 2 years ago very unexpectedly leaving him with two young children and a house that was mortgaged in his wife’s name only. At the time and really until very recently it has been all he can do to just do the things he “must” in order to survive. At the time of her death a family friend who is an attorney stepped up and offered to assist him in probating her estate, etc. He provided them with a variety of things for the mortgage company and at their advice ceased making payments. Recently he has attempted to contact the mortgage company again and they never received the documents requested for him to even be able to discuss the loan. He has limited funds available and not enough insurance money to pay the house off. They continue to send his wife letters stating that they are going to foreclose – but no action has been taken yet. Any suggestions on his best course of action?

    • JohnGWatts says:


      I’m sorry to hear of this sad situation. Ultimately if the mortgage company is not paid per the mortgage/note, then foreclosure is a legitimate choice.

      As a general rule there is no requirement that I’m aware of that requires a mortgage company to allow a spouse or other relative to “step in” and pick up the payments. I have often see mortgage companies willing to consider to do this but only when the spouse is appointed as the administrator or executor of the estate of the wife.

      If he wants to stay, then the best thing to do is to write and call and explain his situation and see if there is any help he can get. But since he hasn’t paid in 2 years and the house is not in his name, it may be best for him to consider moving and starting fresh.

      This is one of those situations where everyone is put in a bad position — the mortgage company, the family, etc. I have not seen this work out very often.

      If these folks live in Alabama they are welcome to call us and we can chat but I think this will end with them needing to leave the house.

      Sorry I don’t have a “better” answer than this….

      John Watts

      • Sherri says:

        Thank you so much for your response. It is a very sad situation. I appreciate your candor on what you think the best solution to his situation is.

  10. Sandy says:

    My mom has lived with my sister and her kids for 15 years. A few years ago her and her new husband bought a house left this one. My sister was still paying rent on this house because she did not want my mom move in with them in the new house. My mom stayed and sister continued to pay rent because her son lived there at time with my mom. My sister quit paying the mortgage 6 mos ago and now the house is being sold on the courthouse steps on 3/13/13. My mom is 83 and has health issues and she does not want to move from the home. What can be done if anything and how long would she have to move out once it is auctioned.

  11. Crystal says:

    My husband and I requested a modification on our home in January of 2013, here in Alabama. Today, March 22, we received a letter of foreclosure. However, we have never been issued any information on our modification request. When I called the mortgage company, I was told all the paper work had been in since Feb, but we needed to refile. How is this possible? We feel as if they did not complete our initial request on purpose. Any ideas on what to do?

    Thank you,

    • John Watts says:


      I’m sorry you are going through this. Here are some thoughts for you:

      First, there are all sorts of different modification programs with different rules and procedures. But normally you are supposed to receive a notification in writing that your modification has been turned down 30 days before any foreclosure occurs.

      Second, a key for you is going to be to document ruthlessly. By this I mean, call the mortgage company. Daily or more often. Document when you called, who you called, what happened, etc. Use your cell phone to have a record of the call. Take a screenshot to show the time of the call. Make notes as to what happened.

      Call the foreclosure lawfirm. Ask everyone why this is happening and what your options are — tell everyone you want to save your home and you want their help.

      Making you resubmit loan modification information repeatedly is a favorite trick of mortgage companies. But don’t give up — keep pushing and document every effort you have made and will make.

      Third, understand the mortgage companies will often lie and sometimes your only choice is to sue the mortgage company violating the law. One advantage is this normally gets it out of the hands of some faceless person that you cannot get in touch with and puts it in the hands of an Alabama lawyer who is being paid to defend the mortgage company. The mortgage company has an incentive to figure out what went wrong and how to make it right with you as they are paying money to their lawyer and face the possibility of having to pay you money if the mortgage company violated the law.

      Fourth, I think you need to get with an Alabama foreclosure defense lawyer. You can call my firm (Watts & Herring) at 205-879-2447 and ask to speak to Randi. She is our paralegal over foreclosure cases. She can get your information and then she and I will talk about how we can help you and if it makes sense to have a meeting to go over your options. Or you can call someone else but do call a lawyer who is licensed in Alabama and who handles these types of cases.

      You may not need a lawyer — it may be that the mortgage company will do the right thing. But you may need one and better to get one sooner rather than too late.

      If you want some information from us we will be glad to send you some materials to review or we can meet in person.

      Thanks for your comment and we wish you and your family the best!

      John Watts

  12. Anita Dursch says:

    I live in a home in Mobile Al. I have a loan with bank of america. I am behind on the mortgage payments, no doubt about that, but since March of last year I have been trying to get a loan mod. I sent all of the paperwork and later received a letter from them that I never returned a signed loan mod agreement, which I never received and the house was scheduled for foreclosure again. I did another round of paperwork and again the same. Finally, I turned in all paperwork again and actually signed a loan mod document in December 2012, but because the notary didn’t put the year on the signature page of the mod agreement they sent a letter to me on March 4th that they did not receive the loan modification documents and the house was going back into foreclosure. I immediately had the mod notarized again with the correct date and sent to them. My case manager said that should take care of the problem. He unblocked my account, put the foreclosure on hold and allowed me to make the payment for March, then about a week later, the mortgage company sent the payment for March back and I found out that the day after he un-blocked my account for me to make payment, the house was put back on the foreclosure list. In the meantime, I called repeatedly and they just wouldn’t call back. They finally started taking my calls again in April and since then, they say every day they are working on my file to have the house taken off foreclosure list and even allowed the March payment to be made, but when I called to make the April payment they would not allow it. I am 3 business days until the sale is scheduled on 4/23/13. I am at wits end, I have a legal aid lawyer, but when I went to see him, the home had been removed from the foreclosure list, though my case is still open with him. I have contacted my senator and asked them to intervene. I can’t believe that Bank of America is allowed to get away with this sort of behavior and take my home. I am waiting to hear from BOA, my legal aid lawyer and my senator. I have a 4 year old and no where to go and I have upheld my end of the loan mod to the letter, but it seems they are stringing me along until the foreclosure sale happens. The stress and mental anguish of this is horrible. Any Advice?????????

    • John Watts says:


      Sorry I just saw this — I’ve been out of town in a conference.

      It is amazing what Bank of America gets away with — lots of reasons that won’t be particularly satisfying to you.

      You are welcome to contact my office and speak with Randi — she is our paralegal in charge of foreclosure inquiries. It may or may not make sense to fight this. Also if you are still represented by your legal aid lawyer then we won’t be able to talk to you — you will need to get with your current lawyer.

      I’m sorry about all you are going through — I hope things have taken a turn for the better for you!

      John Watts

  13. Anita Dursch says:

    In addition to the above, I have discovered that the last date of public notice was on april 10, but they have scheduled the foreclosure sale for April 23; I thought it had to be 30 days from the last public notice???

    • John Watts says:


      The rules are a bit different when the foreclosure has been “rescheduled” — if you want to let us take a look at the notices and we can let you know if we think they were done properly or not.

      John Watts

  14. Lamar says:

    My home has been foreclosed on and I had previously requested a loan modification, re-in statement figure, asked for an amount for arrearage to even attempt to file a bankruptcy. The mortgage company denied ever receiving numerous faxes with documentation for loan modification. I actually had a representative from a local branch to fax it in. I have the confirmation page. The mortgage company stopped returning my calls. My mother spoke with the VP of the bank to purchase property herself, they would not sell the property for the appraised value. I was never served anything from court formally, I was only left with a notice from the sheriff department on my door. Is there anything that I can do at this point? I have called your office and left numerous messages.

    • John Watts says:


      This is a fairly common dirty trick of mortgage companies — they will deny receiving faxes and fed ex packages even when you can prove they received them.

      Sounds like you may have been foreclosed and then sued. But you must be properly served under the rules.

      Talk with Randi Curb in my office at 205-879-2447 so she can get the details.

      Thank you and sorry this has happened.

      John Watts

  15. Ann says:

    I have been in Chapter 13 for almost three years. I make my payments on time every two weeks. I received a letter from Bank of America’s attorneys stating that I have not paid them since Oct. 2010 and that I would need to pay $26,134.67 within 20 days due to my not making mortgage payments as agreed in my Ch. 13 plan. First off I thought I was making the payments to Ch13, but apparently I was making arrearage payments to them and was supposed to make my monthly payments to BoA! Why did it take them almost three years to notice this and how in the heck am I suppose to come up with that much money in 20 days??? What will happen to my home if we don’t come up with the money?? What else can I do?? Please help!!

    • John Watts says:


      Please get with your bankruptcy attorney because I’m a bit unsure of what has happened. Normally in a chapter 13 you pay your bankruptcy payments into court and that covers your “arrearage” — the back amount owed to Bank of America.

      Then sometimes you include your normal monthly payment in the bankruptcy check but often, at least here in Alabama, the normal monthly payment is made outside of bankruptcy and you would make that directly to Bank of America.

      I don’t know how your bankruptcy was set up.

      I will tell you there is a lot of bad conduct by banks, including Bank of America, when it comes to chapter 13 payments. The banks will falsely claim they have no way to apply bankruptcy payments and it is too much for them to keep up with — in 2013. We have computers, after all. Ridiculous argument!

      Other times they will wait till you are out of bankruptcy and then add bogus charges.

      Anyway, definitely get with your bankruptcy lawyer to figure out what is going on and let us know as there may be others facing this exact situation with BoA or other mortgage companies.

      Thanks for your comment.


  16. APRIL says:


    • John Watts says:

      I’m sorry you are facing foreclosure.

      Just because the foreclosure letters say a foreclosure is happening does not mean the modification has been turned down. Often the “right hand doesn’t know what the left hand is doing” when it comes to mortgage companies.

      Take it seriously and either get a bankruptcy lawyer to help you or get with a foreclosure defense lawyer to look at suing Chase to get them to do the right thing if they have violated the law.

      We have recently filed several cases against Chase prior to a foreclosure. Sometimes that is the best option.

      Stay active in taking action as you have been and this will give you the best chance of saving your home.

      If you file bankruptcy that normally will immediately stop any foreclosure — at least temporarily.

      Best wishes and keep us posted on what is happening.

      Thanks for your comment.

      John Watts
      Birmingham, Alabama

  17. Steven says:

    I was able to pay off my loan as soon as I got the forclosure letter. Will the forcloseure still stay on my credit report? The property is in Alabama.

    Thanks in advance for your help,


    • John Watts says:


      You paid off your home loan completely before the foreclosure?

      If so, then your credit report should say that the balance is zero. It may show that you were about to go into foreclosure.

      There was a recent Alabama Supreme Court case that made the point that there is no such thing as a “foreclosure” until the property is sold and the foreclosure deed is recorded. Taking this statement — which I believe is a correct analysis of the law — then if your credit report says “foreclosure proceedings begun” or “property in foreclosure” then that is incorrect.

      Give us a call at 205-879-2447 and ask to speak to Randi Curb as we are filing more suits against mortgage companies for false credit reporting and would like to see exactly what you are dealing with….


      John Watts

      ps — congrats on paying off the loan!

  18. Teri Whittle says:

    Dear John,
    Our home has got a sale date of Dec 5. We worked for almost 3 months with Granite Law (California) to get the paperwork for a modification with Nation Star. Every time I called Nation Star I was directed to who ever picked up the phone 1st. They kept telling us the required paperwork had not been received.. but it had been. Steve spoke with some one named Andrea Smith and they confirmed the “appointment date via phone” with someone in underwriting. NO call was ever received! They gave us the runaround until we only had 2 options.. ask to reinstate.. which we were told would NOT stop the sale of the house or just let it be sold. Too late for chapter 13.. Our payments were $1700 a month. I was scheduled for back surgery on Dec 18 which I have now had to cancel. I’m on disability and I cannot get this house packed up in 10 days if that’s all they give us.. We have no more money to fight with. Nation Star FORCED US TO MAKE THIS DECISION. If they had only worked with us and not given us the run around we probably could have saved our home. Granite Law I believe went beyond trying to help. They were only paid to help with the modification but still tried to help us get to whoever we needed to talk to. Today is the 22 of Nov. our house will be sold in 1 week. Any advice?

    • John Watts says:


      I did not see this until now.

      I’m sorry you were given the run around by Nationstar — they are a difficult company at times and we have sued them a number of times for the way they conduct business.

      If you still have questions, even after a foreclosure, feel free to call my office at 205-879-2447 and if we can help you we will.

      John Watts

  19. Joann says:

    My husband and I filed Chapter 13 a year ago, but due to losing employment, we have been unable to make our bankruptcy payments and house payments on time every month. Now, our bankruptcy has been dismissed. I am devastated by this, as I now have a great job and thought things were picking back up! I am very anxiously awaiting word as to what happens next! We had an amount of $8,000-$9,000 worth of Loan Modifications under protection of bankruptcy. Will we get an opportunity to pay this amount or will Wells Fargo take this directly into a foreclosure without giving us the opportunity to catch this up? I am very scared… The letter states that we cannot file bankruptcy again for 90 days but I understand that within that 90 days, we could be foreced from our home

    • John Watts says:


      A lot depends on where you are — if in Alabama then 90 days is normally enough time to foreclose but you will have some options to stop the foreclosure.

      Several things to consider.

      Having income to pay your mortgage now is critical — hard to help someone who can’t afford their mortgage. Sometimes we have people who say “I can afford $600 a month on my $300,000 mortgage.” Not going to work.

      You can still try to get a loan modification — be persistent and document everything.

      If you live in Alabama give us a call if you don’t have a lawyer — we’ll be glad to find out more about your situation. 205-879-2447.

      Best wishes

      John Watts

  20. John says:

    I’ve look up about filing a UCC form to pay off my mortgage , does it really work or do you have of any knowing of this?

    • John Watts says:


      I’m not sure what you mean by filing a UCC form.

      Do you have a mobile home or is it a traditional type of home?

      Do you still owe money on it or have you paid it off?

      If you live in Alabama feel free to give us a call at our Birmingham office 205-879-2447 and we’ll be glad to chat with you.


      John Watts

  21. Miesha says:

    My husband and I have a mobile home that is only in his name. We have been behind the last few months by one payment with 21st Mortgage. They call our friends and family many times a day as well as emailing. We have called and asked them if there is any assistance available to us (as adding that one payment to the end of the loan) and they tell us there is no assistance for us because we are behind. They are sending us foreclosure notices. My husband is laid off and I am the only one working. We paid 35,000 for our house in April of 2011 and they requested 15,000 down payment and I have been making payments for over two years and I still owe them around 29,600. Is there anything that we can do? Any help or advise would be helpful. These people are very ugly to you on the phone and we have stopped answering their calls and emails. Almost forgot they drove from Knoxville, TN last week to my home.

    • John Watts says:


      One question that will be important is did you start doing business with 21st Mortgage at the beginning or did your loan get passed around and then ended up with 21st Mortgage? Different laws can apply — for example if the loan was behind (“in default”) when 21st Mortgage received it, then they normally will be considered a “debt collector” under the Fair Debt Collection Practices Act (FDCPA) which gives you some good options.

      I’m surprised they are saying there is no help for you since you are behind — normally mortgage companies tell consumers they can’t help consumers until the consumers are behind.

      As far as calling your neighbors and family, document what is going on. Get people who have been called to write down what happened. Take pictures of caller ids, take screenshots of calls coming into cell phones, etc.

      Feel free to give us a call at 205-879-2447 and ask for Randi and she’ll get more information from you to see if we can help you.

      Take care,

      John Watts

      • Miesha says:

        This mortgage originated with 21st mortgage. They are simple driving us crazy. We done some research this week and I found out escrow statement for when they went up on our payment in April and noticed that they paid our homeowners two times. So from what I can see we have two payments that could be credited. They are refusing to talk with us about the escrow account and told us that even if they did pay it two times that it did not matter that we are still behind. I have the money to pay my November payment but think I might need to setup a appointment to discuss this crazy people. I went on and checked with consumer affairs and there are alot of people that are having problems with 21st. The are ugly and be little you anyway that they can.

        • John Watts says:

          It is amazing how crazy these companies act when you catch them cheating you on escrow — they act indignant as if it is your problem. Sorry you are dealing with them — give us a call at 205-879-2447 and ask for Randi if you all live in Alabama.

          Best wishes

          John Watts
          Birmingham, Alabama

  22. Brandon says:

    Ok here is my situation. I work in the mortgage industry. Back in 2005 the company I worked for did a purchase on their portfolio side in which I did an 80/20 type loan on an adjustable rate mortgage on the 1st. The 2nd mortgage was an adjustable rate mortgage for 5 years then it was a balloon. You basically had to modify it to 5 more years. This particular company was thriving and in 2009 brought on a ton of new employees from New South Federal Savings Bank closing there doors. Everyone currently in position was demoted to other positions and due to my pay being cutback 40% I had to file bankruptcy in 2010. I continued to pay my mortgage payments even though it was included in BK-7. I was never asked to re-affirm the debt.
    In October of 2010 the 2nd mortgage was at the 5 year mark so I inquired about modifying it for another 5 years like in the past which was at no cost. I left the company in December of 2010 and continued to work with them on the modification of the 2nd mortgage. Finally in March of 2011 they sent me a modification package. They raised my interest rate over a point and where charging me $1875 for doing this. Also I would be signing paperwork that would make me liable for the debt since I was never asked to re-affirm it. At that point I inquired of my rights and do to not re-affirming the debt I was not liable for the 1st/2nd mortgage anymore. I did not take the modification that was offered.

    • Brandon says:

      I worked with the collection department on trying to do a short sell on my house to help them out. I got a realtor and over the next 1.5 years tried to sell the house for them and was not making any payments but remained living in the house. I got a letter stating they were going to initiate the foreclosure process so I took the house off the market in October of 2012. I was dealing with the servicing company at this point due to the company I worked for shutting down and taking new ownership. I was informed of things associated with the foreclosure procees and now have a firm date of 1/15/2014 for the doreclosure sale. I do not have money to move nor obtain legal counseling. I was informed I may be offered moving money from the buyer of the property which most likely will be the servicing company per the Servicing company. I owe $127,000 and more than likely it will be sold for $75,000 back to them.
      I just recently found out that the original paperwork that was performed on my mortgage had many errors on it including the ARM Index not being correct and a glitch in there system until 2007. What are your suggestions or options? I have 2 kids under 8 years old at home and they go to 2 different schools. I would have to pay high transfer fees to move one or the other. 1 of my 2 kids also has a disability and thanks to Obamacare I cannot afford the coverage especially with having a child with a disability. At the end of my rope. Thanks

      • John Watts says:


        It sounds like you discharged the second mortgage and did not re-affirm it.

        If so, this means you are not liable for this debt.

        Now, if you don’t pay, a foreclosure can happen but I’m interested if the mortgage company said in any way that you are liable for the loan.

        Give us a call at 205-879-2447 to let us chat with you about your options if you live in Alabama.

        Good luck and sorry for the difficulties you are going through.

        John Watts

  23. Brandon says:

    Yes they told me I was not liable due to them not having me sign a re-affirmation agreement. They were in between mergers and missed it. I do live in Alabama.

  24. Ingrid says:

    I own a home that I have owned before my husband and I married. He has a home and we can not keep up with both homes. If one of them are foreclosed on will the other spouse be responsible for any deficiencies

    We, try to keep our finances separate.

    • John Watts says:

      If you live in Alabama then this will give a general understanding of the law.

      Generally, only the person on the note — that is the debt that is owed — is responsible if there is a deficiency (where the home is sold for less than what is owed on the note).

      So if your husband’s house is foreclosed, it should not impact you on your credit reports or any legal responsibility. Opposite if your house is foreclosed.

      There can be some other issues involved and we will be happy to talk to you about your options — you can call us at 205-879-2447.

      You need to think about economic issues — which house makes the most sense to keep — and non economic issues such as where you both want to live, etc.

      Tough decisions but y’all are smart to be thinking about these now so that you can make the best plans possible.

      John Watts
      Birmingham, Alabama

  25. Dorothy says:

    I have been dealing with Bank of America on a loan modification for going o 2 years Everythime I try to follow up with them they tell me something different my loan is in review, didn’t receive all the documents, or need to refile for modification due to time has expired…. Now I have received notification in Dec 2013 that my loan has been sold to Specialized Loan Services… SLS is now telling me that I will need to resubmit everything ….. I haven’t made a payment since March 2012 due to my loss of wages and I was in an accident that permitted me to work for 4 months, and I have this year experienced 3 deaths I. My family I. The last 3 months… I receive a letter from SLS stating notice of default and notice of intent to foreclose if all of arrears nor pd in 33 days…. I have a bankruptcy lawyer to file chapter 13 but didn’t want to do so if SLS was going to be able to modify my loan…..when I spoke to them last week they were going to be putting me a packet in the mail to resubmit the docs for loan modification …. Pls help if I go ahead & file my ch 13 bankruptcy can I still get approved for a loan modification & is this saying I have to be out of my home in 33 days of do I have time to complete my bankruptcy??? From mobile alabama

    • John Watts says:


      Ultimately you need to consult with your bankruptcy attorney.

      I’ll give you a few general thoughts that I hope will help you think through the issues.

      First, you need to get with your bankruptcy lawyer to figure out what your payments would be in a chapter 13 as you’ll need to make (generally) your normal monthly mortgage payment and pay on the arrearage (back amount) — is this something you can now afford?

      Second, you could always try to modify the loan and if that doesn’t work then file bankruptcy. There are some disadvantages to doing this but sometimes this can be a good strategy.

      The new servicing rules under the law RESPA are now in effect and these make it better for consumers as far as modifying and having some (not great but some!) protection against foreclosures.

      Chat with your attorney and if he or she wants you to talk to us and gives us permission, we will be glad to chat with you.

      Best wishes!

      John Watts

  26. Myra Summerville says:

    We bought our home in December,2000.Never been late with a payment.In June 2013 the mortgage went to another company called “Bayview Loan Servicing”. It’s been a nightmare.Several months ago we got a letter from Bayview stating ‘since we were having problems making our payment we might want to consider foreclosure,selling, etc’.Again all payments are up to date and never late.My husband (retired military) is in poor health and had a minor stroke when we got the letter.I called Bayview and the lady said it was standard procedure that they send the letter to everyone.After reading the horror stories re: Bayview online,I started paperwork with CitiMortgage to refinance in November.Bayview has not cooperated with Citi at all sending verification of our payments etc.Now they are saying we were over $2000 short in escrow(there was over $1600 in escrow in Oct) and they require us to have a minimum of $600 starting each year in escrow and wanting a lump sum payment of $2600 or our house payment will go from $577 up to over $800 a month.I’m so stressed over this mess I don’t know what to do.I’m just praying we get our refinance.Citimortgage even told these people how ‘unprofessional’ they are.We were doing fine paying our bills.Was just wondering if you have any knowledge of Bayview or complaints from anyone else. Thank You

    • John Watts says:


      This Bayview does not have the best reputation and they way they are treating you is improper.

      I’m sorry you are having to deal with this.

      If you live in Alabama give us a call and ask for Randi at 205-879-2447 and explain your situation to her and tell her I asked you to call her.

      One lesson from your situation is that even if you do everything right, these mortgage companies can still be incompetent so you have to protect yourself. Keep your proof of payments — keep all documentation (like the October escrow statement you mentioned) — you never know when you will need it.

      Thanks and I hope the refinancing goes through so you can get “shed of” Bayview!

      John Watts

  27. Melissa E says:

    I have a home in Alabama and live in Virginia. My home isn’t in the best of shape and I’ve had no money to fix it up. So no one wants to come close to what is owed so I’ve not been able to sell it. Normally I am not behind but ran unto financial issues in july and ive behind a month ever since. I always make my payment before they are 60 days so I dont gavr ti pay the past due total. Today when I went to pay like normal I was told they wouldn’t accept anything but the full past due because I was 60 dats late when I’m not. Now I am thanks u to them. She said yesterday they srnt a letter of intent to foreclose. I hate this house and I hate this bank and I’d love to be out from under it. What are my best options? I cannot afford a difencifiy so I don’t know what to do. Can you please give me some advice.

    • John Watts says:


      I can’t tell you exactly what to do without sitting down with you in person or by phone/video and learning your unique situation.

      But in general terms here are some options:

      *Let the house go in foreclosure
      *Work on a loan modification
      *File chapter 13 bankruptcy
      *Sue the mortgage company if the mortgage company has done anything wrong.

      Each choice has consequences — good and bad.

      You really need to evaluate your financial condition and situation and see what is best for you after you understand your legal options.

      If you want to chat with us call Randi Curb at my office at 205-879-2447 as she is our foreclosure defense paralegal. She can get some basic information and then set up a meeting.

      I’m sorry you are in this difficult position and if you would like to have a conference, let me know and we can make that happen.

      John Watts
      Birmingham, Alabama

  28. Tia says:

    Hi. I came home today to discover a few people in my yard to empty out my house. Apparently, my house has been bought in a foreclosure sale. I did not know about this. I also have given up my right to redemption b/c I did not contact them in time due to my work schedule. So to my understanding, I have to leave immediately. Is there anything I can do to remain in my home? At least until I find somewhere to put all my belongings?

    • John Watts says:


      If you live in Alabama, then yes there are some options. Contact my office and speak to Randi at 205-879-2447.

      We can look and see if the foreclosure was done properly or if it was illegal.

      Even if you move out, you may still have a claim for damages against the mortgage company if it violated the law so feel free to give us a call as soon as possible so we can help you figure out your options.

      John Watts
      Birmingham, Alabama

  29. robin says:

    I am with seterus they wouldn’t give me a modifications I had to pay the total amount due plus attorney fees. Plus I was paying my insurance and property taxes now they set it up where they are pay it and raised my payment. What can I do to stop forclosure.

    • John Watts says:


      If you live in Alabama feel free to call us at 205-879-2447. As far as Seterus not giving you a modification, that may or may not have been legal. It depends on when you were looking for a modification — the rules changed significantly January 10, 2014 — and it also depends on whether you met the requirements or not.

      On your escrow (taxes and insurance) I would need to know more about what is happening but traditionally playing games with escrow has been a favorite activity of mortgage companies, particularly to try to force you into a default/foreclosure situation.

      Keep careful notes about what is happening — save all envelopes, voicemails, etc — and get with a lawyer in your state ASAP.

      Best wishes

      John Watts
      Birmingham, Alabama

  30. Cathy says:

    Our home was recently foreclosed on, although we were going through a home modification.We moved out within the 10 days, and requested an amount from the lender to use our right of redemtpion. It has been almost 10 days and we still have not heard from them. The letter was sent through an attorney on our behalf on March 4, 2014. What happens if they do not respond to us in the 10 days?

    • John Watts says:


      If you have an attorney, you will need to work through your attorney who should be able to answer this question.

      In general terms, however, if you properly moved out (in Alabama) within 10 days, and then you notified the current owner of your intention to redeem the property, you need to get a statement of the amount the new property owner claims is owed.

      This will include items such as:

      **Amount paid

      Sometimes we see charges/fees that are not allowed in a redemption context so do carefully study what you receive.

      If you don’t get an answer, my approach has been to send another request and make sure it is done by certified mail.

      I’ve never had a property owner refuse to respond to a properly sent redemption notice so I’ve not had to do this but ultimately if you want your home back you file suit to get the court to order the redemption.

      Best wishes and I hope it works out ASAP for you.

      John Watts
      Birmingham, Alabama

      • Cathy says:

        What costs are legally included in the redemption? Is it the cost of what the purchaser(who was our lender) paid, plus interest and legal fees, or what they said that we owed on the property?

        • John Watts says:


          It is the cost of the purchaser, plus interest, plus certain types of repairs or improvements they made to the property. Best thing to do is ask, in writing, for the redemption amount and then see if the fees/charges look accurate.

          If not, ask in writing what the fees/charges are for….

          Hope this helps!

          John Watts

  31. TERA says:

    Our mortgage got 1 payment behind approx. 2yrs ago. Since that one missed payment we have paid every month. Now Wells Fargo is telling us that if we don’t pay the 1300.00 worth of late fees and the one missed payment they are going to start the foreclosure process. They also advised us to go online and apply for the modification. I have read horror stories online about wells fargo and this process. Can a lender really foreclose if you have paid every month and just have fees? we have lived in this home for 11 years and have never had this problem, unfortunately we fell on some hard times but we tried to quickly recover. We can pay our monthly payment but just don’t have the extra money to pay this past due amount all at one time by TOMORROW! ANY advise would be greatly appreciated.

    • John Watts says:


      Wells Fargo can be difficult to deal with and I’m sorry you are in this situation.

      The best advice I can give you is to gather up all of your paperwork — all the mortgage statements, cleared checks (or however you pay), letters from Wells Fargo and any attorneys who have threatened foreclosure, and get this to a foreclosure defense lawyer to review.

      Based upon what you told me, no there can’t be a foreclosure. The new rules in force now prevent a foreclosure for the most part unless you are 120 days behind.

      Now I’m not sure where the 1300 in late fees comes from — sometimes lenders (including Wells Fargo) illegally apply your payments wrong to “manufacture” a late fee every month. Its against the law and against your contract (note) unless you have an unusual mortgage note.

      Pull your credit reports also at to see what Wells Fargo is saying there about your loan and how behind you are.

      When you meet with a lawyer who knows this area of the law, you’ll be able to send out some very specific, and powerful, letters to get to the bottom of this. If Wells Fargo doesn’t respond correctly, then you can sue in Federal Court. Very powerful stuff. We talk about this some here —

      If you live here in Alabama give my office a call and ask for Randi Curb who can help you gather up your information and then we can meet. Our phone number is 205-879-2447.

      Best wishes!

      John Watts
      Birmingham, Alabama

  32. Misty says:

    I know I need to see an attorney, but here is my situation:

    *the mortgage on the home in question is in my husband’s name only (however my name is on the deed). We bought it in 2007. It’s in a bad loan (interest only), and we owe more on the home than it is worth.
    *a few years back we bought another home, in my name only, and began renting out the home in question.
    *I’ve recently transferred to Florida with my job, and sold the house that was in my name. My husband quit his job in Alabama for me to transfer with my job, and he is not working now.
    *The renter of the home in question skipped out on his lease in October, and we have been footing the mortgage since then. We have had it “for sale by owner”, but have not had any luck (there are homes nearby that have been for sale for over a year).

    I want to get out of this interest only loan, but with my husband not working now, he won’t get approved, and I do NOT want to put my name on it. I also don’t think he would be able to qualify for a hardship modification because it looks like they get copies of your tax returns, and I make way too much money.

    We have not paid February 1st or March 1st payments. I went online today (March 25) to pay the payment due February 1st and they (Green Tree) would not let me. We called and they REFUSED to accept only the payment due February 1st ($1,013). They said they have put the loan in default, and the only options they gave were to pay both February and March payments, or pay $1,500 for March 1st payment, and $1,500 for April 1st payment. So essentially $3,000 within a week. This is the first time in SEVEN years that we have been 30 days late. The guy even said that was the reason they were being generous enough to give us this “great offer”. They were so rude about it. The home is VACANT. I do not care if they go “lock the doors”, as they said. I could honestly not care LESS about this house and would LOVE to give it back to them, but I just don’t know if that will be the best decision.

    So, my question is how will this affect me and MY credit. My name is not on the mortgage, but since I’m his spouse, can this affect my credit and ability to buy another home? I am currently looking to buy a home here in Florida, and do not want this to impact that.

    If there is a deficiency owed, will I be responsible for it as well, since I’m his spouse? I would be willing to pay a deficiency if it is reasonable (under $20,000), but I’m not paying some ridiculous amount. Can they come after me? Do I need to get an attorney?

    Thank you for your help.

    • John Watts says:


      Yes you need to get with a lawyer — if the property is still in Alabama I’ll be glad to help you.

      Call us at 205-879-2447 and ask to speak to Randi Curb who is our foreclosure paralegal.

      Green Tree is, how can I say this, not the easiest company to deal with and they don’t seem to be overly concerned about following the law. Normally rejecting payments is not an option — the laws have changed as of January.

      Your husband’s credit can be impacted — he can be sued — but you cannot if you are not on the loan. There can be, as you might imagine, circumstances where this can still impact you but in general terms you should be ok.

      Let’s talk this through as you have some strategic decisions to make on the home — keep it, do a modification or other “loss mitigation” methods, let the house go, etc.

      Call us at 205-879-2447 and we’ll be glad to help.

      John Watts

  33. Tia says:

    Hi, John its me again. From March 5. I spoke to Randi awhile ago. I’m waiting to hear from her again. I am in the process of responding to my ejectment lawsuit. I will more than likely be handling this on my own because I don’t have the income to pay an attorney. I’m not trying to fight for my house anymore. I know I lost it. I really want help on what to put in my response letter to ask for more time before I move out. Thanks for everything. You and Randi have a big help. Blessings!

    • John Watts says:

      Sorry you are dealing with this Tia — contact my office at 205-879-2447 and we’ll see what is happening.


      John Watts

  34. Bill says:

    Can I repurchase my home that was foreclosed on after it is listed with a realtor? And if so, will I still be responsible for the legal fees, interest, etc.?

    • John Watts says:


      In Alabama, if you redeem the property you will have to pay certain charges in addition to what the property was bid for. Now if you are not “redeeming” the property but just buying it, then you just pay the price you agree to with the realtor.

      As far as whether you owe any money from the foreclosure, that’s going to depend on whether there was a deficiency. A deficiency is where the property sold, at the foreclosure sale, for less than you owed.

      Do you know if that happened?

      Has anyone told you that you still owe money on the house?

      John Watts

      • BIll says:

        I can’t get them to tell me anything. I requested an itemized redemption amount, via certified mail, on March 24th (that was when it was signed for). I have yet to receive anything, although I did speak to their attorney who told me I would have to pay the amount I owed on the house, plus interest and fees—which is about $70,000 more than what they have the house listed for at the realtor.

        • John Watts says:


          I would send another certified mail letter asking to explain why the amount is so much higher.

          You can also pull from probate court the foreclosure deed on the property to see what it sold for at the foreclosure sale. Compare that to what you were last told you owed.

          If you can’t get straight answers out of them, call my office at 205-879-2447 if you are in Alabama and we’ll be glad to help you get to the bottom of this.

          John Watts

  35. Hubert says:

    My mother lived in Alabama and passed in July 2013 . I have taken care of everything but her house without probating her will. She has a reverse mortgage which is held by HUD. The house is not worth as much as is owed so I decided to accept the option “deed in lieu”. Seems HUD is in a hurry so they started foreclosure in February and now aren’t interested in the “deed in lieu” option. The house is empty and they have re-keyed the locks. My question is, do I need an attorney or should I just let things play out. Are there any financial liabilities that may come back against her estate ??

    • John Watts says:


      Reverse mortgages can get a bit tricky and the mortgage companies sometimes accidentally (on purpose) forget the rules that apply.

      Whether it makes a difference depends on whether there is going to be any attempt to go after the estate.

      Be glad to chat — call my office at 205-879-2447 and we can set up a call if you are out of state or in person if you are close by.


      John Watts

  36. Elizabeth says:

    My father passed away 10 yrs ago…..(when my Mother died I paid the house off in full 20yrs ago) my fathers widow claimed she owned house or 3/4…… Well finally judge ordered forced sale no one else bid but me…. For doubled assessed $$!
    Question how long does judge have to make decision on auction price? Been almost 8 weeks widow still in house….I own 5/8 and tried to settle with her before auction. I have lost 10 years of rental income on house….plus $38k paying house off.
    The court has my $$ and I have no answers!!!
    Thank you for any info

    • John Watts says:


      I’m sorry you are dealing with this and I wish I could help. I don’t know anything about this area of the law. I think this is more of a pure property law or family law type issue.

      Do you have a lawyer?

      If so, your lawyer may can request a hearing with the judge.

      If you don’t have a lawyer, I suggest you get one immediately who knows the local court and who knows property law and family law.

      I hope this will get worked out ASAP for you — I can only imagine how frustrating this is for your family.

      John Watts

  37. AJ says:

    My husband and I filed chapter 7 bankruptcy and was discharged in 2010. We did not reaffirm the 1st or 2nd Mortgage. We have continued to make payments on the 1st mortgage but are behind two months. We haven’t paid on the 2nd mortgage in 4 years since it was charged off. It has been sold and the investor Partners for Payment Relief and has a lien on the property. How do we manage/deal with this company? We want to keep our home. We live in Alabama.

    • John Watts says:

      Thanks for your question AJ.

      If you discharged the debt, and did not reaffirm, then the debt is gone. You don’t owe on the first or second unless something very odd happened.

      But the lien remains and the house can be sold at a foreclosure sale. Normally if you make the payments, there will be no foreclosure.

      I’m a bit unclear on whether the 2nd mortgage company has foreclosed or are they collecting against you or what is happening?

      You can do a loan modification, even after a discharge, as long as the company makes it clear you have no personal liability or exposure on the “loan.”

      If you would like to, call my office at 205-879-2447 or contact us through the webform on our contact us page and we’ll be glad to help you think through these issues.


      John Watts

  38. Diane B says:

    Mr. Watts,
    I have been reading over the Q&A’s and I hoping for some guidance. I’m in Mobile County and I had a thriving home title insurance business for more than 15 years, making about $180k annually plus my husband’s income. Payments were never an issue. The business slowed in 2012 and came to a screaching halt in mid 2013. I was fortunate to find work in my field, however, the income is only a quarter of what I’m accustomed to making. We have made many financial adjustments but have been struggling more and more. Our credit has been affected but I still have never missed a payment and rarely have late fees (until recently on the late fees). I also have a rental house. The rent barely covers the mortgage (when the renter pays) and I’m still in the hole with property taxes and insurance. The rental needs soooo many repairs and I don’t have the income to make the repairs. Our home, which is also in need of repair, has an escrow shortage which as increased my pmt by $200. We have several credit cards (we just paid off several after selling a motorcycle) that I’m finding I just can’t pay anymore. We make way too much money for chapter 7 and I just can justify paying an attorney (no offense) the cost for filing chapter 13 when I can basically due the same thing the court will…..which is spread out my secured debt over a period of time. I know Ch 13 will fend of debt collections though. Basically, we have pretty much decided to stop paying everything except our secured items and let the rental house foreclose and possibly our home too. If we keep our home and our secured debts, we will have about $200 a month in expendable income, which is nothing. If we let our home foreclose, we can rent a smaller, cheaper home and have more expendable income after necessary bills. The BIG issue with our home is we are in dire need of a new AC unit for the home and it’s going to cost upwards of $6000. I’m having AC repairs at least once a month now. Also, we have an inground pool that needs repair, which we don’t have the money for that either. Our currently bills range around $7500 a month, which includes utilities and insurance. Our income is $5400 a month. If we keep our home, our bills would be $5200 a month. I know I’m kind of all over the place with this but I hope you get the picture. Also, I tried contacting my credit card companies about my financial situation and asked if they would reduce interest rates (or not charge late fees) for the next 6 months and they all say “that is not something we can do.” They were not willing to help. I’ve tried to refi but our scores are too low, I guess due to the high number of credit card balances. What advice can you give on paying or stop paying our unsecured debt and letting the house(s) foreclose? If we do consider CH. 13, do I have to include ALL my debt in the repayment or can it be just my secured debt? Any info you have will be greatly appreciated. Thank you!

    • John Watts says:


      Thanks for your post. I’ll do my best to touch on the issues you raised. It may be best to chat this out over the phone so if you want that option, just let us know.

      As far as a Chapter 13, you do include all of your debt as the bankruptcy protects you from collection on all of your debt. You may be able to duplicate the result of a Chapter 13 bankruptcy without filing one — just remember you will always do one of two things (and sometimes both) in whatever activity or result you want in your life:

      **Spend TIME
      **Spend MONEY

      I suggest you sit down with a bankruptcy attorney in your city to take a look at your options.

      Sometimes it is best to walk away from a home but you may want to see if you can get a good loan modification if you have equity in your home.

      However it sounds like you may simply be in a house that is too expensive and needs too much work to hang onto it.

      I suggest you don’t take a chapter 7 off the table — you might qualify based upon the amount of debt you have. Sit down with an attorney to find out if you do — or don’t — qualify for a chapter 7.

      If your credit cards go into default, carefully document any and all calls and letters to you from the companies and any collectors. You may want to send this type of letter to the companies — it is more of a letter to a collection agency — but it still will help stop the automated calls to your cell phones.

      Now the final decision on what to let go into default and what to fight to hang onto is one I can’t make — only you can make — but I can help you think through the issues. Let my office know at 205-879-2447 that you want a consultation about foreclosure and we can do that in person or by phone or video chat — whichever is easiest for you.

      Best wishes and I hope your situation turns around quickly!

      John Watts

  39. Richard says:

    Hi my name is Richard when i got sick aurora bank foreclosed on my home it did not sell but it sold a year later to nationstar bank the local realtor put it up for auction for nationstar went home friday all my belongingins were gone locks changed property was sold at auction on june10 2014 new owners put cameras in yard before they had even closed on property once they closed on friday we were at hospital new owners stole all photos and valuables what are my rights you can you help me I have to go in to surgery in afew weeks to have larynectomy

    • John Watts says:


      We have seen this type of wrongful behavior before. Rather than communicate through the comments, give my office a call and we’ll be glad to help you anyway we can. This way we can discuss details as you may need to file a lawsuit against the mortgage company and perhaps the new owners — depends on the details.

      Call us at 205-879-2447.

      Sorry going through this — be glad to help any way we can.


  40. Jamie says:

    Hi, We really need your advice/help! My husbands job cut everyones hours back from 60 plus to only 40 hours per week. It was a temporary thing but for two months we lost $900 a month in income! Our mortgage is through Chase and I feel like we got shafted. We got behind in our payments but I sent them a letter informing them of what was happening and that we would have our tax return soon and we would catch up our payment. We sent them two payments, Two weeks apart totalling $2300.00 which was $100 shy of 4 months payment and we was 5 months behind. They sent us the payments back and would not accept them. During that time they sent us a mortgage modification package which we completed and returned. We never received and answer. Then we received a letter from an attorney stating we were being forclosed and informed us of the sale date. I then sent Chase another letter letting them know that we were upset and confused. That we tried to pay the payment but they would not take the money. They were still sending a monthly statement but wouldn’t take the money and we were getting letters about being foreclosed. So they sent another mortgage modifiction package which we completed and returned. We never received an answer. Then we received a letter from an attorney informing us that our house was sold. Chase bought it from themselves. We only have 7 days left of our 10 days to get out. I feel like they just wanted to foreclose on us. I feel like we never had a chance. We have 5 kids, two that are 4 & 5 that live with us and the other 3 who are here when they visit. My 5 yr old starts kindergarten in two weeks and I feel very overwhelmed and defeated. It is hard for me to beleive that they throw the towel in on us the first time we run into trouble. How does anyone actually make it to 30 years and still have their house.

    Please advise

    • John Watts says:

      I’m sorry you are dealing with this. We have seen Chase refuse to properly process a loan modification so I understand your frustration.

      Give my office a call at 205-879-2447 and we will help you figure out your options. Just because the foreclosure has happened does NOT mean there is no hope. It makes it hard but not impossible. Make sure you can document everything that has happened — get your cell phone records to document the calls, save all letters, faxes, etc. that you have sent or received.

      Thanks and if we can help you we’ll be glad to do so…

      John Watts

  41. Alyssa Hubbard says:

    Hello John!

    I’m renting a property in Alabama, and I’ve lived here approximately 4 months now. I just received a letter regarding the foreclosure of this home, and I have had no prior knowledge regarding any sort of foreclosure.

    I’ve always paid on time, never missed any payments, and my lease isn’t up for another 7 months, yet the foreclosure says I have 90 days to move. What do I need to do?

    Thank you for your time,
    Alyssa Hubbard

    • John Watts says:


      Has the home been foreclosed or it is about to be foreclosed?

      General rule is a legitimate lease must be honored by the new owner. There are some rules and exceptions but in general the lease will be honored for a period of time.

      Why don’t you contact my office at 205-879-2447 and send us the letter saying you have 90 days to move — we’ll take a look at it and give you our thoughts.


      John Watts

  42. Beth says:

    You are providing a very valuable service by answering questions. Thank you! I apologize in advance for a lengthy message.

    A very complex situation has occurred in our family. My daughter and her husband purchased a poultry farm with 8 poultry houses and a residence. They did very well for the first 8-10 years and, in fact, were several years ahead in paying off the loan. Then, the poultry company required them to do upgrades that were questionable, at best. As they had always grown very healthy flocks with no problems, they did not see the need for an expensive update that did not seem necessary. However, they learned that if they refused to agree to do the upgrades, the poultry company would not provide any chickens to grow. The upgrades required more money than they had managed to save (with 3 growing children), thus they had to refinance the farm in order to make the upgrades. From that point forward, their flocks did not do as well, though they were average in comparison to other growers. They were good growers who had never lost significant numbers of chickens. That changed in the summer of 2011 (I think) when they raised a larger than usual flock to maturity – very healthy, large chickens. Though the weather was predicted to become very hot, the poultry company unexpectedly postponed picking up the chickens by 2 or more weeks. Hot weather and large chickens packed wing to wing in a metal building does not go well, despite the fans blowing, fogging, curtains down, “walking the chickens”, etc. It was an extremely hot summer. In 24 hours, they lost around 3/4ths of their flock of chickens (many thousands). As the chickens were dead, there was no payment forthcoming and the expenses related to growing them were huge. From that point on they were unable to pay their related feed bills, gas bills, water bills, etc. and the poultry company would not bring any more chickens until those bills were paid (knowing the only way they could pay those bills, was to have a flock of chickens to grow..). Additionally, the poultry company now wanted the cooling pads replaced (the previous upgrades they had been forced to do) with something else for another astronomical amount. With no other source of significant income, they simply could not recover financially. This was during the high rate of unemployment across the nation and the jobs they were finally able to find were very low-paying and didn’t even pay for the basic needs of the family. To make it worse, the poultry company kept implying that they were going to work with them and stringing them along but never put chickens back in the houses. The lender also kept giving them false hope of restructuring the loan, even having them sign papers for what they understood WAS the restructured loan. This went on until finally they used up the equity they had accumulated in payments to the lender. They will have a foreclosure sale soon.
    My question is not in regards to the foreclosure process but is in regards to the poultry industry…it seems that there should be some way to have held them financially accountable for the disastrous event that started this downward economic spiral. If they had picked up the chickens as scheduled, I would have to story to tell. Most seem to think the poultry companies have done their homework well regarding how to take small farmers and use them to grow their very profitable product. My understanding is, that despite similar stories as this one, from across the nation, the poultry industry’s ploy continuously is used to persuade farmers to spend upwards of a million and more dollars to grow chickens that belong to poultry companies. It is just so very deceiving. The chicken growers are at the mercy of the poultry company who completely controls the grower’s livelihood. If the grower doesn’t upgrade, he/she receives no more chickens. If there is an act of nature that destroys the farm or kills the chickens, the financial impact is all on the grower. All decisions are made by the poultry company. I hear they are considering requiring at least one person be present and on the property at all times. This would mean that a couple can’t so much as go to church together without hiring someone knowledgeable regarding the poultry house’s water and feed system, temperature monitoring, etc., to babysit the chickens.

    I hope everyone who reads this will just ask themselves, “Hmmmm, if there is profit in growing chickens, wouldn’t the poultry companies would have their OWN poultry farms and grow their own chickens???”

    The answer is that, overall, there is little to no profit in growing chickens – the REAL profit is in selling chicken to grocers. Why would the poultry company take the many risks of growing chickens and battle the unpredictable forces of nature, poultry diseases, etc., when they can convince unsuspecting farmers to grow them, instead.

    • John Watts says:


      I’m sorry to hear what has happened to your daughter and son in law.

      I didn’t know that about the poultry industry. What you described sounds wrong — if they are in Alabama I’ll be glad to connect them with a lawyer that can look into this to see if the company did anything illegal in stringing them along, requiring the upgrades, etc.

      Call my office at 205-879-2447 if your daughter and son in law are interested and we’ll get more details from you and then get you to the right lawyer.

      Again I’m sorry this has happened to them and we’ll be glad to help any way we can.

      John Watts

    • Beth says:

      Thank you for the reply and again I apologize for a lengthy message. I know this is not the appropriate place to have this conversation as it is not really relevant to your readers primary concerns, but as you are not very familiar with the poultry industry, and as I am impressed with your concern for your clients, I will give you my personal observations and opinions in the hopes that you might decide to research this issue and can perhaps helps someone else in the future. It is too late, for us. :-(

      In North Alabama, there was some profit to be made in poultry farms in the beginning years back in the 1980’s BUT only IF you were smart enough or lucky enough to know when it was time to quit. My family has been in the poultry farming business for many years. About 20 years ago, when my father’s health declined suddenly during a time when he was also being pressured to make expensive upgrades to his “almost paid for” poultry houses, he sold his farm to my recently married daughter and her husband. They wanted to raise a family here on part of our family homestead that dates back to 1866. They financed the new upgrades with the farm purchase and also included their home. They did well for the first several years and then the song and dance routine began for them as it had for many others.

      The “catch” in this business is that the poultry company contracts with the farmer (grower) to grow chickens for a certain number of weeks. When the poultry industry first came to our area back in the early 1980’s (I think), they told potential growers they would grow the birds for around 5-6 weeks and then be picked up by the poultry company. The grower would have a week or so to clean out all of the houses, put down new litter, etc. and would get a check when the chickens were slaughtered/weighed. Thus, the grower would receive about 6 -8 flocks of chickens per year. Most growers had at least four and some as many as sixteen. To provide enough income for a family of three or four people, four houses would give them a fair income. However they tended to leave out the “if” in the equation: IF they had no extreme hot or cold weather, IF they received healthy chicks, (which was often not the case) and IF the chickens didn’t contract a virus from outside sources, and IF the growers didn’t become ill themselves. It doesn’t take the new grower long to realize that he/she is at the mercy of the poultry company. The poultry company provides the baby chicks, the feed and the medication/vitamins (for the chicks), etc. The grower makes a huge investment or loan to provide chicken houses built to the current company specifications (which change very frequently), provides the water, electricity, the gas heat/ventilation and of course the constant labor of walking the houses to inspect the birds, frequently picking up buckets full of dead birds, keeping the surrounding area mowed and clean to prevent vermin and insects, etc. Unless there are several strong healthy males in the family, it is also necessary to hire labor. The grower is very motivated to grow large, healthy chickens because he/she is paid based on the weight of the birds. However, regardless of how well they grow the chickens, at any time, the poultry company can demand that the farmers make expensive updates to their poultry houses – else they will no longer receive baby chicks. Even if the farmer doesn’t make a small update or fulfill a general recommendation, they can refuse to bring any chicks. Sometimes, if a farmer just gets a bit argumentative regarding the need for the update, they refuse him/her any more chickens. This can occur at any time but ironically, it seems to most often occur around the time that the grower is within a few years of having their chicken farm paid for, which of course, would make them much less likely to give in to future demands for half-million dollar or more updates which of course must be financed. Another coincidence is that many of the area poultry farmers are steered to the same financial institution. Additionally, this financial institution almost always require that the home of the grower be included in the mortgage and it must actually adjoin the farm. In so many cases, we have watched growers become saddled with unrealistic debt at a time when most were not aware of what was really happening and no foresight of what would eventually take place. The poultry company uses the livelihoods of the growers to keep their own business profitable. We have seen this happen over and over again. With the continuing demands to “update” the poultry houses, the growers almost never gets the poultry houses paid off in order to finally make that promised “all profit”. They either quit and lick their wounds or they continue on and bankrupt. Any profits are eaten up by the continuous additional financing for updates. If, based on his/her good record of consistently growing healthy, large chickens in the existing houses, the grower even balks at installing the updates, then the company threatens them of refusing to bring them any more birds. As the grower generally has invested everything in the poultry farm he/she has little or no other substantial source of income, thus they bankrupt and are foreclosed. This is happening not only across North Alabama but in all southern states who grow poultry. Oddly enough, I have also noticed some of the poultry companies seem to restructure and/or change their names fairly often. I have also researched online and found lawsuits after lawsuits across the south and the ONLY one I found that was “won” was in Texas where a growers association sued Tyson. Even with my lack of a legal knowledge base, it looks to me like those growers will receive little if anything in their lifetime as they await appeals and decisions.

      For getting all of this OFF my chest, I apologize to you and thank you for reading it to the end. However, though it is too late for my family, perhaps someone such as you is exactly who the poultry farmers need to at LEAST expose the poultry industry for what they are doing. Just “Google” poultry lawsuits and you will find that my family is NOT alone.

      The foreclosure auction was a few days and my grandchildren are still crying. It was the typical scenario – no one there to bid but the lender, his “bodyguards” and us. At least I made him bid so that our family has redemption rights. He now has an $70,000 house built in 1972, 4 old chicken houses that are deemed “unusable” and 4 more that ARE useable but of course, they only need a half million dollars of updates. There is absolutely NOTHING that can be done with the poultry houses. It isn’t worth paying for the labor to tear them down and the land they are located on is not useable now for farming or pasture due to the thick layers of large gravel put down to build the floors of the houses. I can’t see anyone with a brain at all wanting to purchase this but I guess we will eventually find out.

      This does remind me of a couple of questions I will ask you and will be glad to pay a fee for the answer (and for being able to vent). Just tell me what to do to submit them properly in order to pay you.

      We are unsure of what is included in the foreclosure in regards to outside utility buildings and such. There is no list of any specific items included in the foreclosure other than the property which we assume includes the house, though even it is not described. They do have a small “front-end loader” that may have been bought with money used from the farm mortgage. However, there are two utility buildings used at their home for general storage that were given to them by me. Also, my granddaughter has a hand-built play house that her dad built, they have a riding lawn mower, etc.

      So here are my questions:

      1. If we remove items that are not “permanently” located and later find that they were supposed to remain, could that negate our rights to redemption”?

      2. Is the 10 days to vacate time counted from the date of the auction or from the date the letter is received?

      Thank you, again. I hope this issue will spark your interest to research the terrible situations most poultry farmers are in.

      P.S. Edit this as desired if you must post the questions here. Otherwise, let me know via email and I will resubmit.

  43. Elizabeth L says:

    I purchased my home in 2007 and put a down payment of 45,000 down on home purchased thru Everett financial, in which they should not have approved me from the beginning on a 210,000 loan by myself… Mortgage then sold to Chase (FHA) I owned my own Floor Covering Store and when the housing market crashed in 07=08 i ended up filing chapter 7 and i did not reaffirm my home… in 2008 me and my husband at the time received an equity loan to pay off credit cards and at that time he signed as co-borrower with me. He was not on the original loan nor the deed. He filed for divorce in 2012 and i lost my job in 2013 and could not afford the payments and my home has been in foreclosure since november 2013, but they keep moving the sale date, it is now scheduled for sept 23rd, 2014. My bankruptcy attorney told me not to do anything nor sign anything that would make me liable. Will ex be responsible, since he is only on the note??? Stuck and don’t know what to do??????

    • John Watts says:


      If the original loan on your home was discharged and not reaffirmed, then you should not have any liability on that loan. But it sounds like after the bankruptcy you and your now ex-husband took out a home equity loan on the house. Or was it just your ex?

      I’m not sure why someone gave you a home equity loan on a discharged mortgage house but if the new loan was made after your discharge then that loan is valid and you (or your ex) will owe that one.

      Who is threatening foreclosure on September 23, 2014? Original mortgage that you did not re-affirm or the equity company?

      If you live in Alabama feel free to give us a call at 205-879-2447 if you want to chat. You may also want to check with your original bankruptcy attorney.

      Also you need to figure out if you want to stop the foreclosure or if you are ready to move on — there are no inherent right or wrong answers. You simply need to discover which is best for you now.

  44. Lori says:

    My ex husband and I purchased a home together while we were married. Now that we are divorced I was awarded the home under the terms that I cannot hold him harmless in the event of default on this indebtedness. It says if I fail to bring mortgage current within 90 days that I shall quit claim my interest to him and he shall assume mortgage and hold me harmless. my 2 children and I reside in the home. I have been making the payments for the last 6 years and now I am currently behind so I applied for a modification. Well being that his name is on the home loan as well as mine they informed me that his signature is required to modify loan. After being approved he would not sign. Even though he is aware of the fact that foreclosure is near. He should have signed a quit deed 2 years ago afyer the divorce but he didnt want to pay the required fees to have one documented. My question is this….me and the children are trying to keep our home. I can afford the new modified payment with no problem but without his signature they cannot allow it. Is there something I can do to where I dont need his signature for this modification? Single mom with 2 kids trying to hold on to our home.

    • John Watts says:


      I don’t know the law on divorces so you’ll need to go back to your divorce lawyer on that to see if he can be required to sign/approve this.

      I know it is VERY frustrating dealing with loan modifications in general and adding in ex spouses just ramps up the complexity higher than it needs to be.

      I’m hopeful you can get some relief from the divorce court.

      Keep us posted and hope things turn for the better quickly for you.

      John Watts

  45. Michele says:

    My husband and I filed Ch. 7 in 2012. At the time that attorney we had told us that we could refinance our 1st and 2nd mortgage in two years to get our payment lower because what we were paying was way high. We struggled for the two years and recently tried to refinance and was unsuccessful. During this process we found out that our 1st mortgage was not non reaffirmed and the 2nd mortgage was reaffirmed. This caused us to be unable to refinance or get a loan. We were never told our options on the reaffirmation and I didn’t even know what it was until recently. I called the law office we done it through and they acted like they didn’t know how it happened. I recently obtained my file from them and unfortunately we did sign the reaffirmation for the second mortgage. The problem comes in because we cannot continue paying the high mortgage payments and have decided that our only option is to let the banks foreclose. Do you have any advice for us? We are in Alabama also. Thanks.

    • John Watts says:


      Sorry this has happened — whether to reaffirm or not is a tricky question. A lot of times only hindsight tells us whether we should have reaffirmed or not.

      It is unusual to reaffirm the second and not the first — not quite sure why that happened. (I think that’s what happened here — let me know if I have read your question wrong).

      You still should be able to try to get a loan modification on the 1st even with the bankruptcy. The new rules covering mortgages that went into force on January 10, 2014, really change the world of foreclosures. Those rules make it clear we can still get a loan modification even on discharged debt.

      Are you current or behind on the first?

      Have you tried to get a loan modification on both loans?

      Are both loans with the same company or different companies?

      Feel free to call us at 205-879-2447 and ask for Carolyn who can set you up an appointment with me — be glad to help you think through your options.

      John Watts

  46. Michele says:


    That is correct, the first was not reaffirmed and the second was. We have no idea why either. As of now we are behind on both mortgages. We have tried to refinance but are told that they can not refinance both loans. The loans are with separate companies.

  47. tammie says:

    I currently lived in my house in Mobile, Al but im 2 months behind. Me and my husband can’t afford the payment anymore. Our house is worth 250,000 but we owe to wellsfargo 178,000. Can we do a short sale or lieu of deed? Which is the best options so they won’t come back and sued us? How long can we stay in the house?

    • John Watts says:


      Sorry in a tight spot.

      Good news is your house is worth more than you owe so you have some options:

      **Start the “loss mitigation” process which is where you can lower the payments, do a short sale, deed in lieu of foreclosure, etc. Ask for all options and ask to be considered for all options. If you need help, give us a call at 205-879-2447.

      **Consider selling your house — if you can sell it and pay off Wells Fargo, that solves the problem and hopefully you can put some money in your pocket also.

      **Anyway to restructure some of your debts or raise your income so you can stay?

      **Bankruptcy can be an option to either stay or to make sure you don’t owe any money.

      Give us a call at 205-879-2447 and we’ll be glad to meet or schedule a phone/video conference to go over your options.


      John Watts

  48. Corey says:

    I had got a truck loan in 2006 through a bank couldn’t make the payment,so I let it go back the bank took me to court. I agree to pay 200.00 dollars a month, then I had to have surgery and was out of work. So since I miss payment they put a lend on my deed in sold my house in a auction for less then my debt was.Now I have 10 day to get out the house. Is there anyway I can get my house back..Thank you

    • John Watts says:


      I’m sorry this happened to you.

      Normally if your house is sold at an Alabama foreclosure sale then if you get out within 10 days you have the right to “redeem” or buy back the property within one year.

      If your house was sold at what is known as a “sheriff’s sale” then I suspect you have the same right but I’ve never actually looked that up so don’t know what the law is on it.

      Did you owe a mortgage on your home or did you own it outright (free and clear)?

      How much was the home worth?

      What was the house sold for?

      Did you get any money out of the sale of your home?

      If we can help you give us a call at 205-879-2447 and hope things will turn around quickly for you!

      John Watts

  49. LaTrece Richey says:

    My church just got a letter from the mortgage holder’s attorney(the mortgage holder is an individual). The letter states that we are in default due to lack of insurance on the property. The mortgage holder tried to make us pay for insurance that he says he has been paying (we have been in bldg since October 2014), but has not provided proof of policy, nor any premium information, nor any paid receipts for the premium. Now his attorney is saying we have 7 days to provide proof of insurance else they will foreclose. Doesn’t the law in AL require that we have 30 days to cure any default? Does the law work the same for a church building as it does for a home?

    • John Watts says:


      The mortgage may be a bit different since an individual and the church owes the money instead of an individual owing money on a residency.

      I focus on individuals who own their homes and who have a mortgage. So I’m not sure exactly what the answer is for your situation.

      Couple of options/suggestions:

      1. Read the mortgage very carefully. Normally it will lay out the requirements to put someone on notice of a default and it will tell the procedures for foreclosing.

      2. Ask the lawyer in writing (certified mail) to explain why this is happening, what about the premiums, policy, etc. and that you are confused why a foreclosure is being threatened.

      3. Get with a lawyer in Alabama to help you do the first two items.

      I wish I could give you a better answer but without seeing the mortgage and the note I’m not sure if what is happening is correct or if it violates the law.

      Best wishes and let us know if we can help you — 205-879-2447.

      John Watts

  50. LaTrece Richey says:

    Continued, this is the first notice of default we have received

  51. Leann says:

    My husband passed away in 2006. My daughter and I never lived in the house after his accident. I was admin of estate and my name was never personally on the loan for the house as he had bought it before we were married. After trying to sale the home several times, the home was foreclosed. Will I be held responsible for any deficiency? There was nothing else in the estate except the house. The house was actually the only reason the estate had to be established.

    • John Watts says:


      I’m sorry for your loss and the challenges you have faced recently.

      Couple of points and questions for you.

      1. You were not on the Note — that is the loan?

      2. Even after he passed away?

      3. When was the foreclosure sale?

      4. Was the foreclosure sale for less than the amount owed so a deficiency may be out there?

      5. If your name was not on the note and you did not stay in the house after the foreclosure, then at least in Alabama I don’t see that you would have any liability or responsibility for the note.

      I suggest you do the following:

      **Pull your credit reports at to make sure this loan is not on your credit reports and to make sure the foreclosure is not showing up.

      **Pull from the probate court the foreclosure deed so you know the amount of the sale price and to make sure your name is not listed anywhere in the document.

      If you have questions feel free to leave a comment or to contact my office at 205-879-2447.

      I wish you the best and thanks for your good question.

      John Watts

  52. Julie says:

    My family had two job losses in the past year and a half and we have struggled to stay in our home. With the most recent job loss, we became five months past due on our mortgage. I worked with Wells Fargo and got a forbearance but it is up now and they want the back payments or a loan modification. This would be fine but my husband found a decent job in LA and we would like to move there. I know that a loan modification requires you to stay in the home for a certain period of time. That is a hardship because we are also paying for my husband to live in LA during the week. They have mentioned a repayment plan but I’ve heard they expect at least 50% of your original mortgage payment on top of the original every month for awhile until it is caught up. Our credit is shot because of the missed payments in the house and some credit cards. Is walking away an option and what would the repercussions be? Also I was thinking of a deed in lieu of foreclosure but my husband actually makes a bit more now than his previous job. I’m at a loss as to what to do. My family is split across two states and I’m desperate to figure this out. Our home is in Mobile County. I’d like to keep it and rent it out but I don’t know exactly how to do that either. Help!!!

    Thank you!

    • John Watts says:


      I’m sorry you are facing this situation.

      There are options for you and one may be a deed in lieu of foreclosure.

      Best thing to do is call my office at 205-879-2447 and ask for Carolyn to set us up a phone or video call to go over your options.

      Few quick thoughts right now:

      **You definitely need to ask for “loss mitigation” which means anything to avoid a foreclosure. This could be a loan modification, principal forgiveness, short sale (sell the house for less than what you owe), deed in lieu of foreclosure (give deed to Wells so there is no foreclosure), etc.

      **If you have a foreclosure, there may be a “deficiency” where you still owe money. You take what you owe, and subtract the foreclosure sales price. Whatever is left is the deficiency. There is not always a deficiency but it is a possibility.

      Feel free to give us a call at 205-879-2447 and we’ll be glad to chat.


      John Watts

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