Becoming a homeowner may often be associated with a lot of joy and excitement but it does come along with a level of responsibility. Unless you’ve saved up the full sum required for the property, you are likely to be dependent on monthly mortgage payments. And that’s okay as you’ve carefully planned your budget and financial situation and are prepared. But what happens if an unexpected situation puts you in the position where you are no longer able to pay your mortgage in the agreed time frame?
One of the roads that this scenario could take you to is foreclosure. Although this word may sound frightening to most, the reality is that if you can keep a peace of mind if you are prepared in advance. In this article, we will go over the Missouri foreclosure process step by step and explore the foreclosure laws that you need to be aware of. As you finish reading, you will be equipped with all the important information about the process, which will help you react accordingly were you to find yourself in a similar situation.
How To Deal With Foreclosure Process In Missouri
Foreclosure in Missouri
For starters, let’s quickly review what foreclosure actually is. Foreclosure in Missouri takes place when a homeowner is no longer able to make regular payments and as a result, loses their ownership of a property. Once the homeowner notifies their lender about their financial struggles, in most cases they will be able to negotiate a time period, during which the homeowner can search for ways to recover the missed payments with the aim of avoiding foreclosure on your house. However, if they fail, the lender has every right to foreclose the property and receive the money via a foreclosure sale.
According to Missouri foreclosure laws, there are two types of foreclosure – judicial and non-judicial foreclosure. Most commonly, the foreclosure process in Missouri is non-judicial, meaning that it will happen with no court oversight but is rather authorized by contract. Alternatively, judicial foreclosure is authorized by Missouri Statute and happens in the circuit court of the property’s country.
So what do we need to know about the non-judicial foreclosure process in Missouri?
Missouri Foreclosure Process
Before the Missouri foreclosure process can start, the homeowner must be at least 120 days delinquent on the loan. Prior to that, the lender cannot start a non-judicial or judicial foreclosure. Once the 120 days have passed, the foreclosure process in Missouri can begin, following a detailed outline.
Step 1: Foreclosure notices before the start
This very first step to starting a foreclosure process is for the borrower to receive two notices. The first one is a breach letter, which is required by Missouri deeds of trust. The breach letter’s objective is to notify the borrower officially that the loan is in default. This letter will also inform the borrower about important information such as the default, the action required to reinstate the loan, a set time period, and listed consequences of failure to fix the problem.
Federal law also requires that the borrower receives information about the options they have to prevent foreclosure.
Step 2: A notice of default
The foreclosure notice of default is the official document that the lender has to fill out to start the process of foreclosure. It must be sent to anyone interested in the property and published in newspapers. As the homeowner, you must be notified at least 20 days before the sale date. The trustee must provide this notice by registered or certified mail to the homeowner or borrower. The terms of the sale must be included in the notice in addition to a description of the property. In order for a foreclosure sale to classify as commercially reasonable, it must take place between 9 AM and 5 PM.
Step 3: Public notice
Before the property can be foreclosed and sold, the lender must notify you and also announce the sale in a daily newspaper with a minimum of 20 publications before the date of the sale. This law is applicable for towns with a population of more than 50,000 people. The law also requires that the date of the sale is included along with a description of the property.
Now that we’ve seen the Missouri foreclosure process step by step, it’s time to move on to the actual timelines involved.
Foreclosure Timeline in Missouri
Every state has its own and independent foreclosure time frames. To ensure that you don’t miss any important deadlines and make the right decisions, it’s essential to understand the timeframes set by your state. Let’s look at what things look like in Missouri.
How long does the foreclosure process take in Missouri?
Given that the foreclosure is standard and does not involve any complications, the normal foreclosure timeline in Missouri ranges between 60 and 90 days. However, keep in mind that the borrower has the right to file for bankruptcy during this time. If so, the time frame is likely to expand beyond 90 days.
Another interesting point to cover is the ability to redeem the property. The foreclosure sale will be completed via an auction. Once the steps have been completed and the sale finalized, if the lender is the winning bidder and new homeowner, the borrower has the right to redeem the property within one year.
There are many cases where homeowners have had to say goodbye to their homes as a result of foreclosure, not just in Missouri but around the world. However, knowing your rights in a difficult and uncertain time like this could help you make choices that will benefit you in the long term. Information could also help you get back your home by using your redeeming rights.
We hope that this article has offered you a basic understanding of foreclosure laws in Missouri and has helped you become better informed about the process. If you find yourself in a situation like this, remember to speak to a professional real estate agency, property investor, or foreclosure expert who can advise you on the best steps to take based on your situation.