HB 90

Sponsor
Session
Regular Session 2018
Title
Residential property, foreclosure, right-of-redemption, time period to redeem further provided for, notice requirement actions, affirmative defense, provided for, time frame for notice requirement actions, further provided for, Sec. 6-5-248 am'd.
Description

Under existing law, a person with the right to redeem residential property has 180 days to exercise that right when the property is sold pursuant to any execution, judgment, or foreclosure sale. Notice of a mortgagor's right to redeem residential property in foreclosure must be mailed by the mortgagee at least 30 days prior to the foreclosure date by certified mail with proof of mailing. The 180-day right of redemption period does not begin to run until notice is given in accordance with state law

This bill would provide that a right of redemption cannot be exercised later than one year after the date of foreclosure

This bill would also provide that possession or production of the proof of mailing of the notice would constitute an affirmative defense to any action related to the notice requirement

Existing law also requires all actions related to the notice requirement be brought within two years after the date of foreclosure, or the action is barred

This bill would limit the time frame in which actions related to the notice requirement can be brought to one year after the date of foreclosure

To amend Section 6-5-248, Code of Alabama 1975, relating to the right of redemption on residential property; to further provide for the right of redemption period after a foreclosure; to provide that the proof of mailing of the notice would constitute an affirmative defense to notice requirement actions; and to limit the time frame in which notice requirement actions can be brought.

Subjects
Property, Real and Personal
View Original PDF: HB 90 - Introduced - PDF

Under existing law, a person with the right to redeem residential property has 180 days to exercise that right when the property is sold pursuant to any execution, judgment, or foreclosure sale. Notice of a mortgagor's right to redeem residential property in foreclosure must be mailed by the mortgagee at least 30 days prior to the foreclosure date by certified mail with proof of mailing. The 180-day right of redemption period does not begin to run until notice is given in accordance with state law

This bill would provide that a right of redemption cannot be exercised later than one year after the date of foreclosure

This bill would also provide that possession or production of the proof of mailing of the notice would constitute an affirmative defense to any action related to the notice requirement

Existing law also requires all actions related to the notice requirement be brought within two years after the date of foreclosure, or the action is barred

This bill would limit the time frame in which actions related to the notice requirement can be brought to one year after the date of foreclosure

To amend Section 6-5-248, Code of Alabama 1975, relating to the right of redemption on residential property; to further provide for the right of redemption period after a foreclosure; to provide that the proof of mailing of the notice would constitute an affirmative defense to notice requirement actions; and to limit the time frame in which notice requirement actions can be brought.

Section 1

Section 6-5-248 of the Code of Alabama 1975, is amended to read as follows:

§6-5-248.

(a) Where real estate, or any interest therein, is sold the same may be redeemed by:

(1) Any debtor, including any surety or guarantor.

(2) Any mortgagor, even if the mortgagor is not personally liable for payment of a debt.

(3) Any junior mortgagee, or its transferee.

(4) Judgment creditor, or its transferee.

(5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale. A transfer of any kind made by the debtor or mortgagor will accomplish a transfer of the interests of that party.

(6) The respective spouses of all debtors, mortgagors, or transferees of any interest of the debtor or mortgagor, who are spouses on the day of the execution, judgment, or foreclosure sale.

(7) Children, heirs, or devisees of any debtor or mortgagor.

(b) All persons named or enumerated in subdivisions (a)(1) through (a)(7) may exercise the right of redemption granted by this article within 180 days from the date of the sale for residential property on which a homestead exemption was claimed in the tax year during which the sale occurred, or within one year from the date of the sale for all other property.

(c) When any judgment creditor or junior mortgagee or any transferee of a judgment creditor or a junior mortgagee redeems under this article, all recorded judgments, recorded mortgages and recorded liens having a higher recorded priority in existence at the time of the sale are revived against the real estate redeemed and against the redeeming party and such shall become lawful charges pursuant to Section 6-5-253(a)(4) to be paid off at redemption.

Once any lienholder, recorded judgment creditor, or junior mortgagee is paid the amount of the person's debt and any accrued interest and other contractual charges, the person has no further right to redeem.

Any lienholder, recorded judgment creditor, or junior mortgagee with a lower recorded priority may redeem from those having a higher recorded priority who have redeemed.

(d) When any debtor, mortgagor, their transferees, their respective spouses, children, heirs, or devisees redeem, all recorded judgments, recorded mortgages, and recorded liens in existence at the time of the sale, are revived against the real estate redeemed and against the redeeming party and further redemption by some party other than the mortgagor or debtor under this article is precluded.

(e) When any debtor or mortgagor conveys his or her interest in property subject to a mortgage prior to sale wherein they are released from liability for the debt, his or her right of redemption under this article is terminated. In the same manner, the right of redemption granted under this article to the spouses, children, heirs, or devisees of debtors or mortgagors terminates when the debtors or mortgagors have conveyed their interests in the property and are released from liability for the debt.

However, where debtors or mortgagors have conveyed their interests in the property but remain liable on the debt and are debtors at the date of the foreclosure sale, the debtors and mortgagors retain their right of redemption under this article and in the same manner, their spouses, children, heirs, or devisees continue to be entitled to the right of redemption under this article.

(f) A redemption made by any person under this article, other than the debtors or mortgagors, and their respective spouses, children, heirs, or devisees, shall preclude any further redemption by the person.

(g) Subject to subsection (e), a mortgagor and debtor have priority over any other redeeming party and a mortgagor has priority over a debtor.

(h) The mortgagee who forecloses residential property on which a homestead exemption was claimed in the tax year during which the sale occurred shall give notice to the mortgagor who signed the mortgage in substance as follows:

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." This notice shall be mailed to the mortgagor at the address of the property subject to foreclosure at least 30 days prior to the foreclosure date by certified mail with proof of mailing. This notice also shall be included in the notice required pursuant to Section 35-10-13. For foreclosed residential property on which a homestead exemption was claimed in the tax year during which the sale occurred, the period of time during which a right of redemption may be exercised shall not begin until notice is given in accordance with this subsection, provided that under no circumstances may a right of redemption be exercised later than one year after the date of foreclosure. A defective notice, or the failure to give notice, will not affect the validity of the foreclosure, including the transfer of title to the property. Possession or production of the proof of mailing of this notice shall constitute an affirmative defense to any action related to the notice requirement. All actions related to the notice requirement must be brought within two years one year after the date of foreclosure, or the action shall be barred."

Section 2

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

No articles found.
Action Date Chamber Action
February 15, 2018HAssigned Act No. 2018-126.
February 15, 2018HDelivered to Governor at 10:08 a.m. on February 15, 2018.
February 15, 2018HClerk of the House Certification
February 13, 2018HEnrolled
February 13, 2018SSignature Requested
February 13, 2018HPassed Second House
February 13, 2018SMotion to Read a Third Time and Pass adopted Roll Call 393
February 13, 2018SThird Reading Passed
February 1, 2018SRead for the second time and placed on the calendar
January 18, 2018SRead for the first time and referred to the Senate committee on Banking and Insurance
January 18, 2018HMotion to Read a Third Time and Pass adopted Roll Call 50
January 18, 2018HThird Reading Passed
January 11, 2018HRead for the second time and placed on the calendar
January 9, 2018HRead for the first time and referred to the House of Representatives committee on Insurance
2018-02-13
Chamber: Senate
Result: Passed
2018-01-18
Chamber: House
Result: Passed