Non-Judicial Foreclosure Process is generally shorter and involves less steps than a Judicial Foreclosure Process, as it bypasses the courts and the lawsuits. In states that allow the usage of non-judicial process to foreclose on mortgage and deed of trust loans, the foreclosing lender invokes the Power Of Sale clause when a borrower defaults on mortgage payments. Deed of trusts typically allow for non-judicial foreclosure sale, but not always.

Power of Sale covenant present in mortgage or deed of trust gives the lender or the trustee the right to foreclose the loan in default by filing a notice of default with the county or public recorder’s office. Once the notice is filed, the lender or trustee is required to follow statutory steps related to advertising the auction/sale of the property. Most of the non-judicial foreclosure states provide for redemption of the foreclosed homes under most circumstances. This makes up for the short and expedited pre-foreclosure process.

Steps involved in the non-judicial foreclosure of a residential property :

1. Borrower is at least 30-90 days (2-3 months) behind on their mortgage payments.
2. Trustee/Lender files a notice of default with the county.
3. The pubic sale date is set.
4. The date of auction/sale is published and advertised as required.
5. In case of a satisfactory bid, the property is sold to the highest bidder. Otherwise, the lender may choose to take back the property and hold it as REO.
6. Deficiency judgment may be entered against the borrower if the property is sold for less than the total outstanding balance.
7. Depending on the redemption rights, the borrower can get the property back by paying all the owned monies.
8. A trustee’s deed is given to the highest bidder after the stuatory redemption duration has lapsed.

Alabama Foreclosure Laws allow for both judicial and non-judicial forms of foreclosure process. Either Mortgage or Deed of Trust can be used as legal instruments to secure debt. Foreclosing on a property through the judicial process is quite rare in Alabama as Deed of Trust instrument is widely preferred and adopted.

In Alabama, there isn’t much significance to the type of the legal instrument used, as either of them allow a lender to pursue a non-judicial process even in the absence of a Power of Sale clause. These laws are quite favorable to the lien holders/lenders/banks as they allow for an expedited pre-foreclosure process compared to several other states. The entire process typically lasts from 30 - 90 days.

Alabama Foreclosure Law Summary
Time line:	30 - 90 days
Redemption Period:	Up to 12 Months from the date of sale
Deficiency Judgments:	Allowed
Judicial Process:	Yes, but very rare
Non-Judicial Process:	Yes, commonly used
Legal Security Instruments:	Both Mortgage and Deed of Trust

The following are direct links to the laws that govern Alabama Foreclosures:

Article 1: Powers Contained in Mortgages.

• Section 35-10-1 Power of sale constitutes part of security; by whom executed; effect of conveyance; index of foreclosure deeds.
• Section 35-10-2 Sale under power where instrument silent as to place or terms of sale.
• Section 35-10-3 Foreclosure when instrument contains no power of sale.
• Section 35-10-4 Sale of lands situated in two or more counties.
• Section 35-10-5 Foreclosure deed conveys legal title.
• Section 35-10-6 Additional satisfaction permitted under continuing power of sale.
• Section 35-10-7 Sale to be held in county where property situated.
• Section 35-10-8 How notice of sale given.
• Section 35-10-9 Sales contrary to article null and void.
• Section 35-10-10 Sections 35-10-7 through 35-10-9 not applicable to mortgages or deeds of trust executed before September 29, 1923.

Article 1A: Foreclosure by Power of Sale for Mortgages Executed After December 31, 1988.

• Section 35-10-11 Definitions.
• Section 35-10-12 Execution of foreclosure by power of sale; effect; indexing of deeds.
• Section 35-10-13 Notice of sale; minimum standards.
• Section 35-10-14 Place and time for conducting foreclosure by power of sale.
• Section 35-10-15 Successive sales under power permitted.
• Section 35-10-16 Law governing applicability.

Article 2: Satisfaction of Mortgage Liens.

• Section 35-10-20 When indebtedness presumed to have been paid.
• Section 35-10-21 When payment required to be entered in record.
• Section 35-10-22 Partial payments - When entered on margin of record.
• Section 35-10-23 Partial payments - Notices or demands to enter partial payments or satisfaction.
• Section 35-10-24 Partial payments - Entry by execution and delivery of separate instrument.
• Section 35-10-25 Executors and administrators authorized to execute releases, etc.
• Section 35-10-26 Title re vested upon payment of debt.
• Section 35-10-27 Entry of full payment or satisfaction in record - Generally.
• Section 35-10-28 Entry of full payment or satisfaction in record - Satisfaction by one of several joint mortgagees, etc.
• Section 35-10-29 Entry of full payment or satisfaction in record - Vendor’s or other lien reserved in conveyance.
• Section 35-10-30 Penalty.

Article 3: Deeds in Lieu of Foreclosure.

• Section 35-10-50 Definitions.
• Section 35-10-51 Effect of deed in lieu of foreclosure.

Other Law Resources:

• Section 35-10-50 Definitions.
• Section 35-10-51 Effect of deed in lieu of foreclosure.