By Rachel Lynn Foley, Esq.
May 31, 2008
Missouri: a Non-Judicial Foreclosure State
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.”
A Notice of Sale within the State of Missouri must be published in a newspaper where the property is located. The notice required by section 443.310 shall set forth the date and book and page of the record of such mortgages or deeds of trust, the grantors, the time, terms and place of sale, and a description of the property to be sold, and shall be given by advertisement, inserted for at least twenty times, and continued to the day of the sale, in some daily newspaper, in counties having cities of fifty thousand inhabitants or more, and in all other counties such notice shall be given by advertisement in some weekly newspaper published in such county for four successive issues, the last insertion to be not more than one week prior to the day of sale, or in some daily, triweekly or semiweekly paper published in such county at least once a week for four successive weeks. Such notice shall appear on the same day of each week, the last insertion to be not more than one week prior to the day of sale, and if there be no newspaper published in such county or city, such notice shall be published in the nearest newspaper thereto in this state. Nothing in this section shall be construed to authorize the giving of any shorter notice than that required by such mortgage or deed of trust. Where the property to be sold lies wholly or in part within the corporate limits of any city having or that may hereafter have a population of fifty thousand inhabitants or more, then the notice provided for in this section shall be published in a daily newspaper in such city and where the property to be sold lies wholly or in part within the corporate limits of a city extending into two or more counties, then the notice provided for in this section shall be published in some newspaper published in the county in which the property lies, in the manner provided in this section for publication in such county, even though such property may lie in a city having a population of fifty thousand inhabitants or more. Where the property to be sold is located in more than one county, the notices required in this section shall be published in each county in which a part of the property is located. Other provisions of this section to the contrary notwithstanding, in any county of the first class not having a charter form of government and containing a portion of a city with a population over three hundred fifty thousand and in any county of the second class containing a portion of a city with a population over three hundred fifty thousand, the notice requirements of section 443.310 and this section may be met by advertisement in some weekly newspaper published in such counties for four successive issues, the last insertion to be not more than one week prior to the date of the 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.