I lost my job a while ago and then fell behind in mortgage payments for my home in Alabama. The house is now in foreclosure. I’m wondering, if I end up losing my home to a foreclosure sale, is there any way for me to get it back afterwards?
Yes. In most cases in Alabama, you can repurchase or “redeem” your home after losing it to foreclosure within either one year or 180 days from the sale date. To do this, you’ll have to reimburse the person (or other entity) who bought it at the foreclosure sale for the full purchase price, the cost of any improvements made to the property, interest, insurance, taxes, and some other items.
If you don’t redeem the home within the appropriate time frame (the redemption period), your right to redeem expires. Then you don’t get any further opportunities to get the home back. (Learn more general information about the right of redemption.)
Redeeming After Foreclosure in Alabama
Prior to January 1, 2016, Alabama law gave homeowners one year to redeem the home after a foreclosure sale.
Redemption law as of January 1, 2016. As of January 1, 2016, Alabama law provides a 180-day redemption period after the foreclosure sale for homestead properties—if proper notice about the right to redeem was given (Ala. Code § 6-5-248(b)). By law, the foreclosing party must mail you a notice about the right to redeem the home at least 30 days before the foreclosure sale (Ala. Code § 6-5-248(h)).
What is a homestead property? For the purposes of Alabama's redemption law, a "homestead" is a residential property on which a homestead exemption was claimed in the tax year during which the foreclosure sale occurs.
Redemption period if proper notice is not given. If proper notice is not provided before the foreclosure sale, you get:
- 180 days to redeem the homestead property from the date the notice is provided or
- two years from the foreclosure sale, if notice was never provided.
Non-homestead properties. For non-homestead properties, the redemption period is one year from the date of the foreclosure sale.
Applicability of the new law. This new law is prospective and does not apply to:
- sales made under a power of sale contained in any mortgage or junior mortgage dated prior to the effective date of the law (January 1, 2016)
- sales made pursuant to a statutory power of sale with respect to any mortgage or junior mortgage dated prior to the effective date of the law, and
- sales by virtue of a judgment rendered by a court prior to the effective date of the law.
Losing the Right to Redeem
After purchasing the home at the foreclosure sale, the purchaser can demand that you vacate the property. You lose the right to redeem if you do not move out of the home within ten days after the purchaser gives you a written demand for possession (Ala. Code § 6-5-251).
How Much You'll Have to Pay to Get Your Home Back
In order to redeem, you must reimburse the purchaser (the person or entity who bought it at the foreclosure sale) for the full price paid at the sale, plus all other lawful charges such as:
- the value of any permanent improvements the purchaser made to the property since the sale (though if you disagree with the purchaser’s valuation of the improvements, Alabama law permits you to dispute the amount)
- taxes the purchaser paid or that were assessed
- all insurance premiums the purchaser paid, and
- the amount of any other valid lien the purchaser paid off (Ala. Code § 6-5-253).
How to Redeem Your Home
To redeem the house, you must make a written demand to the purchaser, asking for a statement of charges. Within ten days after you make the demand, the purchaser must provide you with an itemized statement of the amounts you must pay to redeem the home (Ala. Code § 6-5-252).
If the purchaser does not provide the statement to you within ten days, he or she loses the right to compensation for any improvements he or she made to the property since the foreclosure sale (Ala. Code § 6-5-252).
What to Do if You Redeem, But the Purchaser Won’t Give Up the Property
Once you have paid the appropriate amount to redeem within the one-year redemption period, the purchaser must give the property back to you. If the purchaser fails or refuses to sign the appropriate documents to give the property back, you can file a lawsuit to enforce your right of redemption (Ala. Code § 6-5-255).
What Happens to Foreclosed Liens If You Redeem Your Alabama Home?
A foreclosure eliminates all junior liens on the property, such as a second mortgage or a judgment lien. (Learn more about what happens to junior liens in a foreclosure in Nolo’s article What Happens to Liens and Second Mortgages in Foreclosure?)
If you redeem the property, any liens that were on the property prior to the foreclosure (but extinguished by the foreclosure) are revived. This means that these liens will reattach to the property -- excluding, of course, the foreclosed mortgage (Ala. Code § 6-5-248(d)).
If Possible, Don’t Wait Until After the Foreclosure to Save Your Home
Even though Alabama law gives you time after the foreclosure sale to reclaim your home, in most cases, it is better to take action before the foreclosure sale. This way you have more options to save the property. For example, you could:
- pay off the past-due amounts to reinstate (catch up on) the loan, or
- try to work out an alternative to foreclosure that will allow you to keep the property, such as a mortgage modification, forbearance agreement, or repayment plan.
Keep in mind that you’ll need to act quickly if you want to save your home prior to the sale since the foreclosure process in Alabama is relatively short. (To learn more about foreclosure laws and procedures in Alabama, visit Nolo’s Alabama Foreclosure Law Center.)
Finding Alabama’s Redemption Laws
To find the statutes governing your right to redeem the home after a foreclosure in Alabama, go to Title 6, Chapter 5, Article 14A of the Alabama Code.