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Birmingham Bar Association Summer 2016

Real Estate Law children of debtors, mortgagors and guarantors. Conversely, the spouses and children of junior mortgagees and judgment creditors have no right of redemption. Sometimes, a party with the right of redemption may redeem the property from another party that has redeemed. Any lienholder, judgment creditor or junior mortgagee may redeem from those higher in priority that have redeemed the property. Ala. Code § 6-5-248(c). A redemption made by a judgment creditor or lienholder precludes that party from redeeming a second time. Ala. Code § 6-5-248(f). If the property is redeemed by anyone other than a judgment creditor, junior mortgagee, or any transferee thereof, no further redemption is permitted, except by a mortgagor or debtor. Ala. Code § 6-5-248(d). A mortgagor and debtor have priority over all other parties entitled to redeem, and a mortgagor has priority over a debtor. Ala. Code § 6-5-248(g). 2. When must the Right of Redemption be Exercised? Historically, Alabama law provided that the statutory right of redemption expired one (1) year after the date of the foreclosure sale. The law was changed last year, however. Effective for mortgages executed after January 1, 2016, the statutory right of redemption expires one hundred and eighty (180) days after foreclosure, but only if the property is residential property and only if a homestead exemption was claimed on the property during the tax year in which the foreclosure occurred. (In other words, not all residential properties qualify.) For all other properties, the redemption period remains one (1) year from the date of foreclosure. The new law also provides that for these residential properties homesteaded during the year of foreclosure, the following notice must be given to the mortgagor by certified mail, with proof of receipt, to the address of the property to be foreclosed, at least thirty (30) days prior to the foreclosure: Alabama law gives some persons who have an interest in property the right to redeem the property under certain circumstances. Programs may also exist that help persons avoid or delay the foreclosure process. An attorney should be consulted to help you understand these rights and programs as a part of the foreclosure process. Ala. Code § 6-5-248(f). Failure to give this notice does not invalidate the foreclosure sale. However, the redemption period does not begin to run until this notice is given. B. Judgment Creditors, Junior Mortgagors, and their Transferees 1.  Any junior mortgagee, or its transferee; or 2.  Any judgment creditor, or its transferee. Note that the classification of “debtor” in this section of the Alabama Code includes sureties and guarantors. Note also that the right of redemption is conferred upon (without limitation) the spouses and Birmingham Bar Bulletin/ Summer 2016 25


Birmingham Bar Association Summer 2016
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