“What is this 120 day prohibition on a foreclosure in Alabama?”
“What is this 120 day prohibition on foreclosures in Alabama?”
As of January, 2014, we now have some wonderful new federal laws that prevent a foreclosure in Alabama from occurring until you are 120 days behind.
This is because of the new RESPA (Real Estate Settlement Procedures Act).
Foreclosures before RESPA law
Previously, before these new laws, you could be foreclosed in a matter of just a couple of months in Alabama.
You would be set a default letter.
This would give you 30 days to correct any default or way that you had allegedly violated the contract.
If you did not cure the default than 30 days, then the mortgage company would send you a notice of acceleration letter.
That means they will set the foreclosure date usually 30 days from the date of the acceleration letter.
Our friends who are in judicial foreclosure states cannot imagine how quickly this can happen.
In those types of states, it can take many many months and even years to foreclose.
New RESPA law helps us in Alabama when facing a foreclosure
In Alabama, we at least have this new federal law that says the foreclosure process cannot occur until you’re at least 120 days late.
This is not a reason to delay taking action. This is not a reason to procrastinate taking care of your mortgage.
But what it does mean is that if you have fallen on hard times and you need some help, you know you at least have four months before the foreclosure can occur.
Another consequence of the new RESPA law is the mortgage company is not allowed to lie (amazingly they were before)
More importantly, the law now requires the mortgage companies to treat you honestly and fairly as they evaluate you for some type of loan modification or loss mitigation program.
When the mortgage companies fail to do this, they are breaking federal law.
In this case, you can sue them in federal court for money damages.
They can also be required to pay your lawyer’s fee.
This makes these lawsuits very expensive for them, which is a nice motivational factor here to cause mortgage companies to settle cases when they know they have violated the law.
If you are behind at all on your mortgage, or you are concerned that you soon may fall behind, even 30 days, then you need to sit down with a foreclosure defense lawyer.
Someone who knows about these new rules and find out what your options are so you can save your home.
Not many lawyers know about these rules and so we have been training lawyers on the new rules.
By the way, the mortgage companies cannot stand these new rules because they make the mortgage companies actually treat you honestly and fairly.
That means you can sue them when they violate their obligations to treat you honestly and fairly.
If you are in Alabama and have questions, pick up the phone and call us at 1-205-879-2447.
When you do this, do let us know what mortgage company you’re dealing with them when your foreclosure is set.
There are a lot of deadlines and timing requirements that are very important.
This is why we need to know as soon as possible exactly when the foreclosure sale has been set if one has been set.
We wish you the best of success in keeping your home.
We also look forward to speaking with you if we can help you in any way.
Thanks for reading, and have a great day!
These are some free resources for you.
They will help you understand your rights and options when dealing with your mortgage company.