Missouri Foreclosure Laws

In Missouri both the mortgage and the deed of trust are used as the primary instruments of security. Because this state is primarily a trust theory state the deed of trust is most often used to secure a loan. This means that the property is held in trust until such time has the loan has been repaid in full.

When a trust deed is issued it contains a power of sale clause. This is a clause which predetermines a trustee has the right to sell a property if the borrower defaults on their loan payments. In terms of a mortgage, the property secures the loan and a power of sale clause is not included in this type of agreement.

In the case of a non-judicial foreclosure taking place, very strict guidelines have to be followed by the trustee to repossess the property on the part of the lender. In the case of a judicial foreclosure the lender has to apply for legal action from the courts. If a non-judicial foreclosure takes place, it can take as little as 60 days to finalize and it is not nearly as expensive as a judicial foreclosure, this process is allowed to be contested however and this may prolong the process.

Borrowers have post-sale statutory rights of redemption in Missouri when their property has been sold by the trustee. However the process is very onerous and they have to provide a notice of their intent to do this not more than 20 days after the sale takes place. Then post a bond for the costs involved. They then have up to twelve months to redeem the property. Deficiency judgments are rarely granted if the sale of the property does not cover the costs which need to be recovered by the debt, they are evaluated on a case-by-case basis.

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