The Alabama Supreme Court has held that a foreclosure sale is invalid if the foreclosure price is unconscionably low. In Collins v. W. Ala. Bank & Trust, 2025 WL 2627910 (Ala. Sept. 12, 2025), it held that sale for 10% of fair market value is, by itself, a sufficient reason to undo the sale. However, sales for 30% or less (meaning for 10% up to 30%) are valid unless there is other evidence of “unfairness, misconduct, fraud, or even stupid management.”
Since the sales were were for 47.5% and 26.4% of its fair market value, they were valid because the owners could not show “other circumstances” that would justify setting aside the foreclosure. Collins v. W. Ala. Bank & Trust, 2025 WL 2627910 (Ala. Sept. 12, 2025).
While this case reflects the prevailing law, it seems to violate the legislative intent behind foreclosure statutes and arguably wrongfully strips owners of the equity in their property. Foreclosure reform is indicated when one reads cases like this one.