Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Varies by Process; Typically 90 days
- Right of Redemption: Varies by Process
- Deficiency Judgments Allowed: Varies by Process |
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In Alaska, lenders may foreclose
on deeds of trusts or mortgages in default using either a judicial
or non-judicial foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit
to obtain a court order to foreclose, has been instituted more since
the late 1980's, when lenders found that they were foreclosing on
residential property worth substantially less than the amount owed.
Generally, after the court declares a foreclosure, your home will
be auctioned off to the highest bidder.
In the case of judicial foreclosure, the process is carried out according
to the rules of equity, deficiency suits are permitted and the borrower
has no rights of redemption.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale
clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the balance on a loan
in the event of the their default. In deeds of trust or mortgages
where a power of sale exists, the power given to the lender to sell
the property may be executed by the lender or their representative,
typically referred to as the trustee. Regulations for this type of
foreclosure process are outlined below in the "Power of Sale Foreclosure
Guidelines".
Power of Sale Foreclosure Guidelines
- If the deed of trust or mortgage contains
a power of sale clause and specifies the time, place and terms of
sale, then the specified procedure must be followed, provided it
meets the minimum protection laws set forth by the State of Alaska.
Otherwise, the non-judicial power of sale foreclosure is carried
out in the following three phases:
- The trustee must record a notice of default
in the office of the recorder of the recording district in which
the property is located not less than thirty (30) days after the
default and not less than three (3) months before the sale.
Said notice of default must state the name of the borrower, the
book and page where the deed is recorded and it must describe
the property, the borrower’s default, the amount the borrower
owes, and the trustee’s desire to sell. It must also state the
date, time and place of the sale.
Within ten (10) days after recording the notice of default, the
trustee must mail a copy of the same by certified mail to the
last know address of (1) the borrower, and (2) any person whose
claim or lien on the property appears of record or is known to
the lender of trustee and (3) any occupant. The trustee may have
the notice delivered personally instead of sending it by certified
mail.
- Any time before the sale, the borrower
may cure the default and stop the sale by paying a sum equal to
the missed payments plus attorney’s fees. The lender may not require
the borrower to pay off the entire remaining principal balance
of the loan to cure the default, just the missed payments and
attorney’s fees. If the lender has recorded a notice of default
two or more times, then the Alaska statutes provide that the lender
can refuse to accept the borrower’s monies for the missed payments
and attorney’s fees and proceed with the foreclosure sale instead.
- The sale must be made at a public auction
held at the front door of a courthouse of the superior court in
the judicial district where the property is located. The trustee
must sell to the highest and best bidder and the lender may bid
at auction.
The trustee may postpone sale of all or any portion of the property
by delivering to the person conducting the sale a written and
signed request for the postponement to a stated date and hour.
The person conducting the sale shall publicly announce the postponement
to the stated date and hour at the time and place originally fixed
for the sale. This procedure shall be followed in any succeeding
postponement.
When this type of foreclosure process
is used, the borrower has a right to redeem the property and deficiency
suits are not allowed.
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