Foreclosure Process in Missouri (MO)Topic: Foreclosure
In Missouri both judicial or in court and non judicial or out of court foreclosures are used. As in all states where both forms of foreclosure are followed the determining factor as to which method will be used by the bank is whether or not the deed of trust or mortgage contains a power of sale clause. The power of sale clause allows the lender to proceed towards selling the home in question without first seeking a court order to do so. This obviously saves the bank both time and money. It is in the banks best interest to spend less money and move more quickly toward the sale of the property. So, whenever the bank can pursue foreclosure non-judicially, they will do so. Most deeds of trust or mortgages do contain a power of sale clause. So, most foreclosures are done out of court. In the event that no power of sale clause was written into the deed of trust or mortgage than judicial or in court process must be followed.
The in court foreclosure begins with the bank filing a lawsuit against the homeowner who is having difficulty remaining current on their house payments. By doing this, the bank is seeking to obtain a court order to foreclose. Once this court order has been issued, the bank can then proceed towards the sale of the home. From this point on, both judicial and non judicial procedures are basically the same. Occasionally, the power of sale clause in a particular case is very specific in its language. If it states the place and date and terms of the sale, then those instructions must be followed. In all other cases, the next step in the process begins with the notice of sale being mailed to the homeowner. This letter must be sent no later than twenty days preceding the scheduled sale date. This same notice of sale must be published in a local newspaper that has circulation in the county where the home is located. This publication of the notice of sale must be run no less than twenty times. It must be continuously run in that paper right up until the scheduled sale date. This requirement is enforced, if the home in question is located in a city with fifty thousand residents or more. If this home is located in an area where there is less than fifty thousand inhabitants, then the advertisement of the upcoming sale date must be run once a week for the last four weeks leading up to the scheduled trustee's sale. The last of these four ads must not be place any later than one week prior to the scheduled sale date.
Within twenty days preceding the scheduled sale date, the banks attorney is required to send a notice of sale by certified or registered mail to the homeowner and any other entities or persons with an interest in the home. That would include a second mortgage holder, anyone with a lien against the property, or anyone with a trust deed on the property. The out of court foreclosure process in the state of Missouri usually takes from 60 to 90 days. Judicial or in court process can take a lot longer depending on how large the docket of files to be processed prior to the case in question can be started. The lawyer for the bank, commonly referred to as the trustee, conducts the sale. This sale is a public auction with ownership of the house being awarded to the highest bidder. All bidders in Missouri must be able to pay in cash. Missouri does give the former owner of the property sold at auction the right to re-gain ownership. This is called a right of redemption and the filing frame allowed to re-purchase this property is the twelve months following the auction date. This purchase price required to exercise this right of redemption would be the price paid at the trustee's sale or auction.
If the bank wishes to pursue a deficiency judgment after the sale has taken place, Missouri allows for this to be done. A deficiency judgment is the right to seek additional money from the former home owner to make up the difference to the bank between the money generated by the sale and the amount of the loan. The only reason a bank would pursue this course of action is if there is some evidence that the former homeowner has some assets worth taking. Most people who lose their home to a trustee's sale do not have any other assets. The banks of course realize this. Blood from a stone...don't try. Consequently, deficiency judgment, though allowed, is rarely pursued. Missouri has a right of redemption period of one year if judicial process was followed. The person desiring to regain ownership of the home they lost in this foreclosure process can do so if they file an intent to redeem with the court sometime in the first twenty days following the sale. This course of action requires the former homeowner to post a bond for all costs and fees due. The price that will need to be paid to regain ownership of the home will be the full amount of the unpaid loan plus cost like attorney's fees etc.
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