AL Underwriting Summary

Search/Exam

• Minimum Search Requirements -- No statute However the long-standing customary search periods are: for loan policies, a minimum 30 year search, although circumstances can require a lengthier search; for owner’s policies, a minimum 60 year search, although circumstances may require a lengthier search.
• Plant or other search restrictions -- No
• Additional Requirements for REO Searches -- No
• Foreclosure Checklist -- N/A
• Special Searches Required (Code, HOA, Utilities)? -- None
• Survey Requirements
  • Purchase – not on platted residential
  • Refinance – not required

UPL

• All legal documents must be drafted by an attorney licensed to practice in the State of Alabama. Parties to a transaction can draft their own documents if they are doing so on behalf of themselves.

• Title Opinions must be rendered by an attorney licensed to practice in the State of Alabama.

• Searching, examining title, closing, and disbursing do not have to be handled by an attorney. Commencing 1/1/13, agents issuing commitments, policies and endorsements must be licensed as agents and the signatory must be likewise licensed.

Vesting

• joint tenants with rights of survivorship. Right of Survivorship must be express on face of deed.
• Tenants in common, presumed absent statement of survivorship
• Tenants by Entirety & Community Property not recognized.

Property Tax

Real estate taxes are paid in arrears and become due October 1 of each year and become delinquent on January 1 of the following year. Tax sales occur in the spring, usually in April or May, but each county conducts their sales at different times.

Mortgage/Transfer Tax

• Mortgage tax in Alabama is $1.50 per $1,000.00
• Deed tax in the state is $.50 per $500.00.
• Withholding is also required in certain circumstances when the grantor is either not a resident of Alabama or is not deemed a resident.

Who May Serve As Trustee On Deed Of Trust

Alabama is a mortgage state.

Time Limitations

• US Judgment Liens 20 years, renewable for 20 years
• State Court Judgment Liens 10 years
• Federal Tax Liens 10 years (+30 days); can be refiled
• State Tax Liens 10 years
• Estate Tax Lien Federal 10 years
• State Inheritance Tax Liens 20 years
• Mechanics Liens 6 months
• Financing Statements 5 years
• Mortgages
• HOA Liens
• Condominium assessments

Odd Stuff

• Cancellation/Commitment fee is not prohibited in this state. It is customary to charge this fee.
• Under Alabama’s Residential Mortgage Satisfaction Act (to be effective 3/1/2013) an affidavit of satisfaction may be signed by a title insurance company or by a licensed attorney acting as its agent. See SB 347; Alabama Code Section 35 – New (codification is pending). However, the authorization of the mortgagor(s) in the mortgage for which release is being sought must be first obtained.
• If the seller is neither a resident or a deemed resident, and the sales price is $300,000 or more, 3 percent of the sales price is withheld and remitted to the AL DOR if purchaser is an individual. If purchaser is a business entity, then 4 percent of the sales price must be withheld and remitted to the AL DOR.
• Usury statute is Code of Alabama (1975) Section 8-8-1 et seq. However the statute does not apply to loan transactions secured by real property and there is no interest rate cap.