Unless You Received The Proper Notification, Your Alabama Foreclosure Is Illegal
Unless You Received The Proper Notification, Your Alabama Foreclosure Is Illegal.
The Alabama Supreme Court does not often speak to foreclosure issues, but it did recently in Jackson v. Wells Fargo which clearly establishes certain rights you have and obligations of the mortgage company before it can foreclose on you.
This is a very helpful opinion to Alabama homeowners who are facing foreclosure.
For a number of years we have argued that the banks are not giving proper foreclosure as required by the simple language of the note and mortgage.
They have been dismissive of these arguments as they were so confident the Alabama Supreme Court would protect them.
In this well reasoned opinion, a united Alabama Supreme Court rejected these arguments and said, in effect, “Hey guys — you wrote the contract (mortgage) — you have to follow it. You can’t make up stuff as you go along.”
(Congratulations and thanks to Earl Underwood and Ken Riemer of Mobile for handling this case!)
You can read the opinion here in a pdf format and we will copy some of it below with our comments.
In Jackson, Wells Fargo foreclosed on the property but the homeowners said this was an improper foreclosure.
The most important part of the initial financing transaction (note/mortgage) is paragraph 22 of a standard Fannie Mae or Freddie Mac mortgage:
“22. Acceleration; Remedies. Lender shall give
notice to Borrower prior to acceleration following
Borrower’s breach of any covenant or agreement in
this Security Instrument …. The notice shall
specify: (a) the default; (b) the action required to
cure the default; (c) a date, not less than 30 days
from the date the notice is given to Borrower, by
which the default must be cured; and (d) that
failure to cure the default on or before the date
specified in the notice may result in acceleration
of the sums secured by this Security Instrument and
sale of the Property. The notice shall further
inform Borrower of the right to reinstate after
acceleration and the right to bring a court action
to assert the non-existence of a default or any
other defense of Borrower to acceleration and sale.
If the default is not cured on or before the date
specified in the notice, Lender at its option may
require immediate payment in full of all sums
secured by this Security Instrument without further
demand and may invoke the power of sale and any
other remedies permitted by Applicable Law….”
Wells Fargo sent an acceleration letter but did not send a letter notifying the homeowners in compliance with paragraph 22 quoted above.
At this stage in the litigation, there remains a
fundamental failure of communication between the parties as to
the function and effect of the acceleration letter. Although
the Jacksons maintain that the acceleration letter was not the
notice of intent to accelerate the debt required by the
mortgage, the bank and the trustee tout it as evidence that
they satisfied their duty under the contract. We agree with
The parties’ confusion centers on the difference between
notice of actual acceleration and notice merely of intent to
After going through a good bit of legal analysis of cases in and out of Alabama, here is what the court held that is very helpful to Alabama homewoners:
The “Fannie Mae/Freddie Mac Uniform Instrument” mortgage
form in this case contained the species of provisions
referenced in the excerpt from Real Estate Finance Law quoted
above. Specifically, paragraph 22 of the form required the
bank to give the Jacksons a notice — before acceleration —
that it was considering an acceleration, upon the failure of
certain conditions, in “not less than 30 days” following the
date of the notice. In other words, the debt could not be
accelerated until at least 30 days had passed and the Jacksons
were still in default. Under the language of this mortgage,
without proper notice of intent to accelerate, acceleration
fails and, consequently, so does the foreclosure sale. See
Sharpe v. Wells Fargo Home Mortg. (In re Sharpe), 425 B.R.
620, 643 (N.D. Ala. 2010).
The acceleration letter is just that — a notice that the
debt had been accelerated, not a notice of intent to
accelerate. The only option it contemplates is payment of the
entire debt, an approach in direct contravention of paragraph
22. Thus, the Jacksons have provided substantial evidence
that essential notice under the mortgage was not given,
resulting in failure of the acceleration, and, consequently,
failure of the foreclosure sale conducted on August 15, 2008.
The trial court’s judgment, to the extent it summarily
disposed of the breach-of-contract claim, was improper.
Here is the bottom line for Alabama homeowners who have faced a foreclosure, or facing a foreclosure: you must look at your note and mortgage.
See what the mortgage companies have promised to do and not do.
They buy and sell so many of these loans that often they aren’t concerned with the details but the details control you, and whether the banks like it or not, the details control them.
Does your mortgage contain a similar requirement to give you notice before accelerating the note?
Did you get that notice?
If the note wasn’t received, and there has been a foreclosure, you may have rights to file suit against the mortgage company.
If you did not get the notice and a foreclosure is planned, you may have the right to sue before the foreclosure and see if the mortgage company will stop the foreclosure.
You can find lots of articles and videos on our website here under the Alabama foreclosure area.
If we can provide you any information, please call us at 205-879-2447 or contact us through our website and we will get right back to you.
We look forward to chatting with you.
Have a great day!
-John G. Watts