Alabama Foreclosure Defense, Bill to Enjoin Power of Sale, and Loss Mitigation Package

ALABAMA FORECLOSURE DEFENSE, BILL TO ENJOIN POWER OF SALE, AND LOSS MITIGATION PACKAGE

PART 1 — PRE-DEFENSE INTAKE CHECKLIST

Borrower Intake:

☐ Date of first publication of Notice of Foreclosure Sale: [__/__/____]
☐ Scheduled sale date and time: [__/__/____] [TIME]
☐ County where sale will occur (courthouse steps): [____________]
☐ Newspaper of publication: [____________]
☐ Pre-foreclosure 30-day breach notice received: ☐ Yes ☐ No — Date: [__/__/____]
☐ Property is owner-occupied homestead claimed for tax purposes: ☐ Yes ☐ No (impacts redemption period)
☐ Loan is federally related (Fannie/Freddie/FHA/VA/USDA): ☐ Yes ☐ No
☐ First complete RESPA loss mitigation application submitted: ☐ Yes ☐ No — Date: [__/__/____]
☐ Single point of contact assigned: ☐ Yes ☐ No
☐ Acceleration of debt declared in writing: ☐ Yes ☐ No
☐ Servicemember on active duty (SCRA): ☐ Yes ☐ No
☐ Property location: ☐ City ☐ Rural
☐ Sale already occurred (post-sale redemption posture): ☐ Yes ☐ No — Sale date: [__/__/____]
☐ Foreclosure deed recorded: ☐ Yes ☐ No

Document Collection:

☐ Original Note (all endorsements/allonges)
☐ Recorded Mortgage with power of sale clause
☐ All recorded assignments
☐ Acceleration letter / 30-day breach notice
☐ Notice of Foreclosure Sale (published version + affidavit of publication)
☐ All loss mitigation correspondence
☐ Payment history
☐ Escrow statements
☐ Tax bill showing homestead exemption claim

PART 2 — VERIFIED COMPLAINT / BILL IN EQUITY TO ENJOIN FORECLOSURE SALE

VERIFIED COMPLAINT FOR TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, DECLARATORY JUDGMENT, AND DAMAGES

Plaintiff(s), for their Verified Complaint, allege:

Parties, Jurisdiction, and Venue

1. Plaintiff is the record owner and occupant of the property at [PROPERTY ADDRESS], [COUNTY] County, Alabama.
2. Defendant [LENDER] claims to be the holder of a mortgage recorded [__/__/____] at Instrument/Book No. [____________].
3. This Court has jurisdiction under Ala. Code § 12-11-30 and venue under Ala. Code § 6-3-2 because the subject real property is located in this county.

Factual Background

4. On or about [__/__/____], Plaintiff executed a promissory Note and Mortgage securing the loan.
5. The Mortgage contains a power of sale clause subject to Ala. Code § 35-10-11 et seq.
6. Defendant has commenced publication of a Notice of Foreclosure Sale, with the sale scheduled for [__/__/____].
7. [DESCRIBE SUBSTANTIVE DEFECTS — broken chain of assignments / loss mitigation pending / improper acceleration / payments misapplied / improper force-placed insurance].

COUNT I — Defective Power-of-Sale Foreclosure (Ala. Code § 35-10-11 et seq.)

8. Defendant has failed to comply with the prerequisites for exercising the power of sale because [SPECIFY — e.g., defective notice; insufficient publication; failure to comply with mortgage contractual notice provisions; lack of valid assignment of record per Sturdivant v. BAC Home Loans Servicing, LP and related authority].

COUNT II — Lack of Standing / Failure to Be Holder Entitled to Enforce the Note

9. Under Ala. Code § 7-3-301 and binding authority, only the holder of the Note entitled to enforce it may foreclose. The chain of endorsements is defective and Defendant cannot establish that it held the Note at the relevant time.

COUNT III — Breach of Mortgage Contract / Failure to Provide Paragraph 22 Notice

10. The standard mortgage requires written notice of default, opportunity to cure (typically 30 days), and acceleration prior to invocation of the power of sale. Defendant failed to provide compliant notice.

COUNT IV — Violation of RESPA / Regulation X (12 C.F.R. § 1024.41) — Anti-Dual Tracking

11. Plaintiff submitted a complete loss mitigation application on [__/__/____], more than 37 days before the scheduled sale. Defendant Servicer failed to (a) acknowledge receipt; (b) evaluate within 30 days; (c) provide written notice of options with appeal rights; and (d) cease foreclosure activity.
12. Plaintiff is entitled to actual and statutory damages, costs, and attorneys' fees under 12 U.S.C. § 2605(f).

COUNT V — Violation of FDCPA (15 U.S.C. §§ 1692e, 1692f, 1692g)

13. Defendant Servicer / foreclosure firm is a "debt collector" and has used false, deceptive, and unfair means.

COUNT VI — Violation of FCRA (15 U.S.C. § 1681s-2(b))

14. Defendant Servicer reported inaccurate information about the loan and failed to conduct a reasonable reinvestigation after Plaintiff disputed.

COUNT VII — Wrongful Foreclosure / Tortious Wrongful Foreclosure (Alabama Common Law)

15. Defendant's conduct in foreclosing without right or for an improper purpose constitutes wrongful foreclosure under Reeves v. Bank of America, N.A. and related Alabama authority.

COUNT VIII — Negligent / Wanton Servicing

16. Defendant Servicer owed and breached duties of reasonable care.

COUNT IX — Quiet Title

17. Plaintiff seeks an order quieting title and declaring Defendant has no right to exercise the power of sale.

Prayer for Relief

WHEREFORE, Plaintiff prays:

• (a) Temporary restraining order and preliminary injunction enjoining the foreclosure sale scheduled for [__/__/____];
• (b) Permanent injunction;
• (c) Declaratory judgment that Defendant lacks the right to invoke the power of sale;
• (d) Actual, statutory, and punitive damages;
• (e) Attorneys' fees and costs;
• (f) Quiet title; and
• (g) Such other relief as is just.

Verification

State of Alabama, County of [____________]:

I, [BORROWER NAME], being duly sworn, depose and say that I have read the foregoing Verified Complaint and the facts stated therein are true and correct to the best of my knowledge.

[________________________________]
[BORROWER NAME]

Sworn to and subscribed before me this [____] day of [MONTH], [YEAR].

[________________________________]
Notary Public for Alabama
My Commission Expires: [__/__/____]

PART 3 — MOTION FOR TEMPORARY RESTRAINING ORDER (Ala. R. Civ. P. 65)

Plaintiff moves under Ala. R. Civ. P. 65 for a TRO and preliminary injunction enjoining the foreclosure sale scheduled for [__/__/____] at [TIME].

1. Substantial likelihood of success on the merits — [SUMMARIZE].
2. Irreparable harm — Loss of the unique homestead constitutes per se irreparable harm. Real property is unique; monetary relief is inadequate.
3. Balance of harms — Defendant's interest in monetary recovery can be protected by bond and continued payments; Plaintiff's loss of the home is permanent.
4. Public interest — Public interest favors compliance with RESPA, Alabama power-of-sale law, and good-faith loss mitigation review.
5. Bond — Plaintiff is prepared to post reasonable bond and to deposit monthly payments into the registry of the Court pending resolution.

PART 4 — VERIFIED ANSWER (If Lender Elected Judicial Foreclosure)

ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

Defendant denies each allegation not specifically admitted, and asserts the following Affirmative Defenses:

1. Lack of standing — Plaintiff is not the holder of the Note (Ala. Code § 7-3-301)
2. Failure of conditions precedent (Paragraph 22 notice; assignments of record)
3. Payment / accord and satisfaction
4. Estoppel and waiver
5. Unclean hands
6. Violation of RESPA Regulation X
7. Violation of FDCPA
8. Statute of limitations
9. SCRA protection
10. Fraud in the origination or modification
11. Defendant reserves the right to amend

Counterclaims (Counts I-IX as set forth in Part 2) are incorporated and demand jury trial on all triable issues.

PART 5 — DISCOVERY REQUESTS TO LENDER / SERVICER

Requests for Production:

☐ Original wet-ink Note and all allonges/endorsements
☐ Recorded mortgage and all recorded assignments
☐ Pre-foreclosure notice and proof of delivery
☐ Published Notice of Foreclosure Sale and affidavit of publication
☐ Complete loan transaction history
☐ Loss mitigation files and denials
☐ Single point of contact records
☐ Pooling and Servicing Agreement (if securitized)
☐ Force-placed insurance records
☐ Credit reporting communications

Interrogatories:

☐ Identify the current holder/owner and the basis
☐ Identify each person assigned as single point of contact
☐ Identify each loss mitigation option considered
☐ State the date the loss mitigation application was complete

Requests for Admission:

☐ Admit Plaintiff did not have physical possession of the Note on the date of first publication
☐ Admit Plaintiff accepted payments after the alleged default date

PART 6 — LOSS MITIGATION APPLICATION COVER LETTER

[__/__/____]

To: [SERVICER LOSS MITIGATION DEPT.]
Loan Number: [____________]
Property Address: [PROPERTY ADDRESS]

Re: Complete Loss Mitigation Application — Demand to Cease Dual Tracking

Enclosed please find a complete loss mitigation application under 12 C.F.R. § 1024.41. Because this application is submitted more than 37 days before the scheduled foreclosure sale, Regulation X requires that you (i) suspend foreclosure activity; (ii) acknowledge within 5 business days; (iii) evaluate within 30 days; and (iv) provide written notice of all loss mitigation options with appeal rights.

Enclosed:

☐ Uniform Borrower Assistance Form (Form 710)
☐ IRS Form 4506-C
☐ Two months of pay stubs
☐ Two years of federal tax returns with all schedules
☐ Two months of bank statements
☐ Hardship letter
☐ Profit & loss (if self-employed)
☐ Proof of occupancy
☐ Dodd-Frank certification

Please confirm receipt and identify my single point of contact.

Sincerely,
[BORROWER NAME]

PART 7 — LOAN MODIFICATION REQUEST

Borrower requests evaluation for, in order of preference:

1. ☐ Permanent loan modification (rate / term / forbearance / forgiveness)
2. ☐ Fannie Mae Flex / Freddie Mac Flex Modification
3. ☐ FHA Modification / Partial Claim
4. ☐ VA Affordable Modification
5. ☐ USDA Special Loan Servicing
6. ☐ Repayment plan
7. ☐ Forbearance
8. ☐ Short sale
9. ☐ Deed in lieu of foreclosure with relocation assistance

Hardship Type: ☐ Unemployment ☐ Reduced income ☐ Medical ☐ Death ☐ Divorce ☐ Disability ☐ Disaster ☐ Other: [____________]
Target Modified Payment (PITI): $[__________]
Documented Gross Monthly Income: $[__________]

PART 8 — QUALIFIED WRITTEN REQUEST / NOTICE OF ERROR (12 C.F.R. §§ 1024.35, 1024.36)

To: [SERVICER] — Designated Address for Notices of Error
Loan Number: [____________]

Notice of Error and Request for Information under 12 C.F.R. §§ 1024.35, 1024.36.

Errors Asserted:

☐ Misapplication of payments
☐ Imposition of unauthorized fees
☐ Failure to credit timely payments
☐ Failure to provide single point of contact
☐ Dual tracking
☐ Inaccurate payoff
☐ Improper force-placed insurance
☐ Other: [____________]

Information Requested:

☐ Identity of current owner/assignee of the loan
☐ Complete payment history from origination
☐ Itemized payoff statement
☐ Loss mitigation file
☐ All endorsements on the Note

PART 9 — STATUTORY REDEMPTION NOTICE (Ala. Code § 6-5-247 et seq.) — Post-Sale

[__/__/____]

To: [PURCHASER AT FORECLOSURE SALE]
Cc: [FORECLOSING ATTORNEY]

NOTICE OF INTENT TO REDEEM AND DEMAND FOR STATEMENT OF LAWFUL CHARGES

Pursuant to Ala. Code § 6-5-247 et seq., [REDEEMING PARTY NAME], as [debtor/mortgagor/spouse/junior lienholder], hereby gives notice of intent to redeem the property at [PROPERTY ADDRESS] sold at foreclosure on [__/__/____].

Pursuant to Ala. Code § 6-5-252, demand is made for a verified written statement of all lawful charges including:

Failure to furnish a verified statement within 10 days forfeits the right to claim such charges.

Tender shall be made to [____________] on or before [__/__/____].

[________________________________]
[REDEEMING PARTY NAME]

PART 10 — BANKRUPTCY REFERRAL AND AUTOMATIC STAY

☐ Pre-filing credit counseling completed
☐ Bankruptcy counsel retained: [____________]
☐ Planned filing date: [__/__/____]

The automatic stay under 11 U.S.C. § 362 halts a non-judicial Alabama foreclosure sale.

PART 11 — SOURCES AND REFERENCES

• Ala. Code § 35-10-11 et seq. (Power of Sale Foreclosure)
• Ala. Code § 6-5-247 et seq. (Statutory Redemption)
• Ala. R. Civ. P. 65 (Injunctions)
• 12 C.F.R. § 1024 (RESPA Reg X)
• 15 U.S.C. § 1692 et seq. (FDCPA)
• 15 U.S.C. § 1681 et seq. (FCRA)
• Sturdivant v. BAC Home Loans Servicing, LP, 159 So. 3d 15 (Ala. 2011)
• Reeves v. Bank of America, N.A. (Alabama wrongful foreclosure)
• Alabama Office of the Attorney General — Consumer Protection: alabamaag.gov

ATTORNEY DISCLAIMER: This template is a drafting starting point only. Alabama power-of-sale foreclosure timelines are notably short — sometimes the borrower has less than 30 days from initial notice to enjoin the sale. Engage Alabama-licensed counsel immediately.