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Missouri, a non-judicial foreclosure state.
By Rachel Lynn Foley, Kansas City, MO
Make no mistake, in the State of Missouri when a foreclosure sale is cried on the courthouse steps your house will be gone. Do not ignore the letters from the mortgage company or the certified letters from attorneys. You only have the following options to stop a foreclosure: 1) Sell the property, 2) Bring the account current, 3) Redeem the property under the guidelines of Missouri Law, or 4) File a Chapter 13 Bankruptcy which in turn will give you up to 60 months to bring the account current and regain financial control.
For the majority of homes in the State of Missouri a mortgage company may proceed with a foreclosure proceeding without going to court. The only time a mortgage company in the State of Missouri would foreclose in court is when the mortgage or deed of trust does not provide the lender with the “right to sell” when the borrower defaults or there is some other defect in the loan paperwork. This is very rare. Normally you only see a judge when you are being evicted and your house is already sold out from under you.
A borrower defaults on a mortgage when they breach the contract. A breach of contract could be when you stop paying on the account or when you fail to provide insurance on the property or when you fail to pay taxes related to the property. Generally the mortgage company will try and work with you. They will call and send letters requesting that you either bring the account current if you are behind, or that you need to purchase insurance, or you need to pay the taxes related to the home. If you don’t correct the default you will then receive a “Notice of Default and Right to Cure” letter which gives you thirty (30) days to correct the default.
When you receive that “Notice of Default” will depend on the mortgage company. I have seen some debtors go six to eight months without a “Notice of Default” and then I have seen the Notice issued after the debtor has been two months late. Missouri Revised Statute 408.554 provides the when and how notice may be given in the case of default. Be aware in the State of Missouri you only need to be ten (10) days late before the mortgage company begins the foreclosure proceedings. After the “Notice of Default” and if the debtor does not respond the next document you will receive is the “Notice of sale.”
The deed of trust will outline when and where the sale will take place. The sale is usually at the county courthouse on the steps between 9:00 a.m. and 5:00 p.m. There is no formal gathering on the courthouse steps but rather an employee of the law firm will read the sale notice at the appointed time. Once he or she finishes the reading of the legal notice the property immediately transfers to the buyer. If the sale is postponed for more than seven days, the trustee must resend and republish the notice.
You have the right to redeem your property under Missouri law in order to protect your property. However, be aware redemption in the State of Missouri is a very strict procedure and therefore vary rarely occurs. Borrowers only have redemption rights if the buyer at the sale was the lender, but not if the buyer was anyone else. You must give advance notice of your intent, either at the sale or 10 days prior to the sale. Second, you must post a bond within 20 days after the sale, which provides an amount equal to the following: the mortgage interest, any secondary loan interest, and taxes that will accrue for one year after the sale; foreclosure expenses; legal fees; damages; plus 6 percent interest. If you are able to meet these requirements then you can redeem the property within one year by paying off the amount owed plus any fees.
To contact an attorney in your area to discuss your options click here.
Written by Rachel Lynn Foley.
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