Missouri Foreclosure 101: A Step-by-Step Guide to the Foreclosure Process
Foreclosure is a term that refers to the legal process in which a lender takes possession of a property from a borrower who has failed to make timely payments on their mortgage. This process can be stressful and confusing, especially if you are not familiar with the laws and procedures that govern it.
Below, you can learn the step-by-step overview of the foreclosure process in Missouri and help you understand your options if you are facing foreclosure.
What is Foreclosure in Missouri?
Foreclosure is the legal process by which a lender takes possession of a property from a borrower who has failed to make timely payments on their mortgage. When a borrower takes out a mortgage to purchase a property, they agree to make regular payments to the lender until the loan is paid off in full. If the borrower fails to make these payments, the lender has the right to foreclose on the property and take possession of it.
Why Does Foreclosure Happen?
There are many reasons why a borrower may fall behind on their mortgage payments, including job loss, divorce, medical bills, or unexpected expenses. When a borrower falls behind on their mortgage payments, they may receive a notice of default from their lender, which is the first step in the foreclosure process. If the borrower fails to cure the default, the lender may proceed with the foreclosure process.
Types of Foreclosure
There are two main types of foreclosure in Missouri:
Judicial foreclosure involves a court proceeding in which the lender sues the borrower to foreclose on the property.
Non-judicial foreclosure does not involve a court proceeding and is conducted outside of the court system. The type of foreclosure that is used depends on the terms of the mortgage agreement and state law.
The Foreclosure Process
The foreclosure process in Missouri typically takes several months to complete and involves several steps.
- The first step is the notice of default, which is sent to the borrower when they fall behind on their mortgage payments.
- If the borrower fails to cure the default, the lender may file a notice of sale, which sets a date for the foreclosure sale.
- The sale is conducted at a public auction, and the property is sold to the highest bidder.
If you are facing foreclosure, there are several options available to you to avoid or delay the process.
- One option is to work with your lender to modify your mortgage agreement, which may include reducing your interest rate or extending the term of your loan.
- Another option is to sell your home through a short sale, which allows you to sell your home for less than what you owe on your mortgage.
- If these options do not work for you, a cash home sale may allow you to sell your house to avoid foreclosure and get out of your mortgage.
The best way to avoid foreclosure is to make your mortgage payments on time and in full. If you are struggling to make your payments, you should contact your lender immediately to discuss your options. You may be able to qualify for a loan modification or other assistance program that can help you keep your home.
Missouri Foreclosure Laws
Missouri has specific laws and procedures that govern the foreclosure process. For example, the borrower has the right to redeem the property up until the sale date by paying off the entire mortgage balance.
Additionally, the lender must provide notice of the foreclosure sale to the borrower and publish notice of the sale in a local newspaper.
Foreclosure auctions in Missouri are conducted at the county courthouse or other public location. The property is sold to the highest bidder, and the proceeds from the sale are used to pay off the outstanding mortgage balance. If the proceeds from the sale are not enough to pay off the entire mortgage balance, the borrower may still be responsible for the remaining balance.
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