Alabama foreclosure: What you should look for in your credit reports to help stop the foreclosure

Alabama foreclosure: What you should look for in your credit reports to help stop the foreclosure

You’re facing a foreclosure in Alabama.

What should you look for in your credit reports to help you stop the foreclosure?

These suggestions are specific to Alabama.

Your state may be similar, but you will want to check on your state’s laws. 

Does your credit report show that you are in foreclosure?

This is very common on credit reports. 

As you approach a foreclosure sale 6 or 8 weeks away, the mortgage company will put on your credit report that you are in “foreclosure proceedings.”

In Alabama, our Supreme Court has been very clear on this issue. 

There is no such thing as foreclosure proceedings in Alabama. 

There is only foreclosed or not foreclosed. 

In Alabama, a foreclosure is when somebody at the courthouse stands outside the front entrance, reads the auction, there’s a high bid, and then the deed is signed. 

All of this is typically done by an auctioneer. 

This may take the whole day or just 5 minutes. 

This is the foreclosure.

There are no proceedings in Alabama. 

Are you 120 days late on your payment?

You really have to be 120 days late for the mortgage company to advertise and ultimately foreclose on you. 

So, if you look at your credit report in July and you’ve got a foreclosure set for August 1st but for June it says you are 30 days late, this doesn’t make sense. 

If you’re 30 days late in June, you can only be 60 days late in July. August would only be 90 days late. 

This is not enough time to foreclose. 

There are certain rules under the Real Estate Settlement Procedures Act (RESPA). One of these is the 120-day rule. 

This is a very important rule. 

So maybe you look at your credit report and it doesn’t match up. 

Maybe this is a good reason to go to court and stop the foreclosure. 

Point out that the mortgage company says you are 120 days late, but that this is not what they are reporting to the credit bureaus. 

The mortgage company may say they were lying to the credit bureaus. 

If this is the defense they want to use, you can use this to your advantage. 

What is the amount they say you are past due?

Does this match up with the “reinstatement” amount?

How much do you actually need to pay to reinstate the loan and bring the account current?

What do they say about late payments?

What do they show about the foreclosure status?

All of these details can be useful. 

These may be part of a defensive move to stop a foreclosure or it may give you the ability to go out on the offensive and sue the mortgage company. 

Suing them could make them think twice about proceeding. 

Sometimes they may have the right to foreclose, but we hammer them in court for another issue. 

When they realize they have been punished for other things, they may stop and say, “You know, let’s just work this out. We’ll get you a good modification. We’ll knock some off the amount due.”

Whatever the result is, it is worth pulling your credit reports when dealing with foreclosure. 

From now through April 2021, you can pull your credit reports for free weekly from each of the 3 credit bureaus – Equifax, TransUnion, and Experian. 

This is completely free. 

Print these or save them to PDF. 

There’s no cost but a few minutes of your time and it may give you either a shield to foreclosure or it may give you leverage over your mortgage company because they are being dishonest in their credit reporting. 

Ultimately, this could help you stop your foreclosure. 

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

We would be glad to help you in any way we can.

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

Thanks for reading, and have a great day!

-John Watts