- 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
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.
More information on Alaska foreclosure laws.
