Alaska Foreclosure Laws

Foreclosure laws are the legal procedures by which a lender repossesses collateral for a loan which is in default. These laws are normally applied when one fails to meet repayment for a mortgage. The lender therefore obtains legal right to sell off the property due to non payment by the owner/borrower.

Alaska is primarily a title theory state where property is held in trust until full payment of the underlying loan is made. A trust deed document is used to secure title to a property which has a power of sale provision. Judicial and non-judicial foreclosure is allowed in this state but non judicial foreclosure is the more preferred and faster way to effect a foreclosure due to the power of sale provision included in the trust deed document.

Non judicial foreclosure

This is the primary method of effecting a foreclosure because of the power of sale provision in the trust deed document. This provision allows for foreclosure upon default on mortgage premiums in order to satisfy the underlying loan. No court action is required but instead, a notice called an election to foreclose is required.

When dealing with a non judicial foreclosure, very strict notice requirements and legal documents that contain the power of sale language are required.

The notice requirements are:

• · Before initiating a foreclosure and not less than 30 days after the lender default on payment, a notice of default must be filed in the county where the property is by the lender. With 10 days after filing such notice, a copy of the same notice must by mailed by registered mail to the defaulting borrower.
• · The said notice of sale must give a description of the default and state the lender’s intention to foreclose the property quoting the sale provision on the trust deed. It must give details on the date, time and place where the foreclosure auction will take place.

Judicial foreclosure

In this state, a judicial foreclosure is also allowed where the lender obtains a final judgment of foreclosure from court. This happens when the trust deed does not contain the power of sale clause. A complaint and a lis pendens is filed in court. A lis pendens is a public notice document that informs the public that a property has a pending suit on it. The property is the auctioned as part of a public sale.

Process period

When a foreclosure is uncontested, it can take a period of 90-100 days depending on the time take to process the required documents. The process can be delayed if the borrower contests the sale in court and seeks to delay or postpone the auction or files for bankruptcy.

Notice of Sale

It is required that a notice of sale be published for not less than 30 days in three public places. It must be published in a local newspaper once a week for four weeks and be put up in the nearest US post office.

Redemption

The state of Alaska does not allow for a post sale statutory right of redemption after a foreclosure is concluded. The borrower therefore cannot reclaim foreclosed property unless this was provided for in the trust deed.

Deficiency judgment

The state of Alaska does not allow for the court to issue a deficiency judgment when property is sold at a public auction for less that the loan amount secured by the trust deed. Only a judicial action may raise a judgment upon which such deficiency may be based on.

Foreclosure laws may change from time to time in any state. It is therefore important to seek legal counsel to obtain updated and current laws.