How does RESPA help stop a foreclosure in Alabama?

Let’s talk about stopping foreclosures in Alabama.

How does RESPA help stop a foreclosure in Alabama?We’ve talked about this in other articles, but let’s do a quick recap.

Alabama foreclosures are non-judicial. This means that there’s no court action filed against you.

There is a specific federal law related to mortgages and foreclosures that can help you stop a foreclosure.

This federal law is called RESPA, or Real Estate Settlement Procedures Act.

How does this help?

RESPA does a couple of things for us.

It tells us that you must be considered for loss mitigation, such as a loan modification, short sale, deed in lieu of foreclosure, etc if your lender participates in loss mitigation (almost all do in some form or fashion).

Anything that can help stop the foreclosure.

If you apply for loss mitigation at the right time, then no foreclosure can happen until a decision has been made.

There’s also this concept of 120 days.

This means that the earliest anything can happen to your home is when you’re 120 days late.

Let’s say your payment is due on January 1st.

Can they foreclose on February 1st? No.  You are only 30 days late.

March 1st? No.  Now you are only 60 days late.

April 1st?  No — this is about the 90 day mark.

End of April? Yes they can since that would be past the 120-day mark.

What exactly can they do at the 120-day mark?

There’s some dispute on this.

It’s a little easier to know in “judicial” states like Florida.

However, here in Alabama, the best approach is to say the very first newspaper advertisement has to be after 120 days or more from the time you are late.

(They will advertise for 3 weeks that they’re going to foreclose on a property.)

One of the most powerful part of RESPA is being able to send letters, such as notice of error and request for information letters.

Notice of error are letters where you go to your mortgage company and say, “You’re making a mistake.”

Maybe they’re saying that you’re behind on your payments when in reality you aren’t late.

We’ve had mortgage companies that have lost $10,000 – $15,000 payments and say, “We know you paid it, but we can’t find it so we’re going to foreclose on you.”

Don’t let them do this!

Send them a letter and tell them they’re making a mistake.

If they claim that you haven’t had insurance on the property, tell them that you’ve had X insurance for however many years (if that’s that truth) and that you’ve told them time and time again.

You can also send request for information letters, where you ask them what they’re doing.

You can ask them how much you owe, how much it will take to reinstate, what they did with your loss mitigation request, etc.

When the mortgage companies ignore these letters or do not properly respond to them, it can cost them up to $2,000 per violation.  And have to pay you attorneys fees and other forms of damages.

RESPA is a powerful law that you should keep in mind if you’re facing foreclosure.

It applies to basically all types of regular foreclosures in Alabama.

Not necessarily with reverse foreclosures, though. Some of it applies and some aspects don’t.

If you have a normal home with a 1st and 2nd mortgage, RESPA can be incredibly valuable.

There are other ways to use RESPA, which we talk about in other articles, but it’s definitely worth looking into.

Hope this is helpful to you!

If you have any questions, feel free to get in touch with us.

You can reach us at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.

We look forward to chatting with you.

Thanks for reading, and have a great day!

-John G. Watts


  1. Benjamin Burkett says:

    I am in a VA loan and got behind on payments due to a work Injury. I applied for a loan mod in dec. and was denied. They set a sell date on March 13 at 2 pm I filed chapter 13 at 9:00 am. They sold the house anyways. I am looking for someone to sue the lender because it is illegal to foreclose on a va loan without offering a loan mod.

    • John Watts says:


      Is the property in Alabama? If so, give us a call at 205-879-2447.

      Do you still have a bankruptcy attorney representing you? If so, get with your bankruptcy attorney first because normally if you file bankruptcy BEFORE the foreclosure it should stop the foreclosure.


      John Watts
      205-879-2447 (ask for Randi)

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