|
If you do not FULLY understand the foreclosure process outlined on this page and how it may apply to you please take advantage of our FREE consultation by clicking here.
The Process
Missouri permits two types of foreclosure:
- Judicial, and
- Judicial under a power of sale clause.
In judicial foreclosure the lender may file a petition
in the office of the circuit court against the borrower and the tenants or
occupiers or property. The petition states the nature of the mortgage and
formally requests the court to render judgment for amount of the debt, to
foreclose the equity of redemption (preventing the borrower from recovering the
property by paying the mortgage) and to order the property sold to satisfy the
amount due. Such a lawsuit will be handled in the same manner as other civil
lawsuits. The borrower may be served in person or by constructive notice
through publication if personal service efforts prove to be fruitless.
Power of Sale Foreclosures
Missouri permits foreclosure under a power of sale
clause. in a mortgage. Before proceeding with a foreclosure sale under the
power of sale clause, the lender must give the borrower 20 days notice of the
sale, whether or not the mortgage or deed of trust provides for such notice.
The property must be advertised for sale as follows:
-
In counties with over 50,000
inhabitants, the notice foreclosure sale must be published at least twenty
times in the daily newspaper and continued to the day of sale.
- In counties with under 50,000 inhabitants, the notice
foreclosure must be published once per week on the same day each week in a
daily, tri-weekly, or semi-weekly newspaper for four successive issues, with
the last publication to be not more than one week prior to the foreclosure
sale.
An affidavit of the printer or publisher may serve as
evidence of publication.
Mailing of the Foreclosure Notice
The trustee who conducts the foreclosure sale must mail
notice of the foreclosure sale not less than 20 days prior to the scheduled
date of the sale to the following parties:
- The borrower named in the deed of trust or mortgage
at the last known address for the borrower.
- The person shown by the office of the recorder's deed
of records to be the owner of the property as of 40 days before the foreclosure
sale, to the last known address shown in the lender's records for such recorded
owner.
- Any person whose name and address is set forth in,
request for notice that has been duly recorded 40 days in advance of the
foreclosure sale date
The notice must be in the following format:
In accordance with R. S. MO 443.325, request is hereby
made that notice of sale under the deed of trust (or mortgage) recorded the ___
day of ____ 19__, (as recorder's number ____ or in Book ___,.) of the records
of County, Missouri, the legal description of the property being __ in ____
County, Missouri, executed by ____ as Grantor (or Mortgagor) in
which______________ is named as beneficiary (or Mortgagee) and____________ as
Trustee, be mailed to ___ (Name) at _______________(Address) _____. (City)
_____, (State).
(Signature)
_______________________
_______________________
(Acknowledgment)
Receipt of Foreclosure: Notice Not Necessary
The borrower does not have to receive the envelope
containing the notice of foreclosure pursuant to a deed of trust or mortgage.
Recording of the receipt issued by the U.S. Post Office for certified or
registered mail to evidence that the envelope has been delivered by the sender
to the U.S. Post Office shall constitute proof of compliance with the notice
requirements.
Trustees
The person named in the deed of trust or mortgage must
conduct the foreclosure sale. However, if the trustee is dead, neglects this
duty or is incapacitated, a new trustee can be appointed if the lender files a
motion in court requesting a new trustee, and the court feels the circumstances
justify an appointment, in which case the sheriff or another suitable person
approved by the Judge can conduct the sale. A foreign corporation may not be a
trustee for foreclosure in the state of Missouri, unless a co-trustee who is a
resident of Missouri is named. Certain nearby states can authorize a Missouri
corporation to act in a fiduciary capacity for an outside corporation. A
trustee may collect a 2 percent commission on the first $1,000,1 percent on
sums over that amount but under $5,000, and 0.5 percent on sums over that
amount.
Sale Procedures
The trustee must conduct the sale in a fair manner at
the time and place and in the manner specified in the notice of foreclosure,
the deed of trust and the statute. The property is to be called out for sale
and sold to the highest bidder. The lender may purchase at the sale, but if it
does so, a right of redemption applies.
Redemption
If any person other than the lender, or some. one
purchasing on behalf of the lender, buys the property at a fairly and properly
conducted foreclosure sale, then no right of redemption exists. If, on the
other hand, the lender buys at the foreclosure sale, as is so often the case,
then the borrower has a right to redeem the property for one year from the date
of sale.
In order to obtain the right of redemption, however, the
borrower must meet many requirements. First, the borrower must give the trustee
or other person conducting the sale advance notice, ten days prior to the sale,
of the borrower's intent to redeem. Second, the borrower must arrange a bond on
which there is one good surety, besides the borrower, who can stand good for a
sum of money equal to the interest that would accrue throughout the year on the
mortgage, and on any prior lien loan, together with the foreclosure costs,
taxes and assessments, and furthermore, a sum equal to 6 percent of all the
sums bid by the successful bidder at the foreclosure sale, whether they were
advanced in cash or not. The bond must be sufficient to cover any waste or
damages inflicted on the property by the borrower. The bond must be in place 20
days after the sale, or else the borrower has no right to redeem. |
