Understanding the foreclosure process in Missouri is an important part of navigating your home foreclosure. You have rights. You have options. Missouri Cash Buyers is one resource ready to help you.
Before we dive in feel free to grab our FREE ebook discussing some ways a foreclosure can be stopped. If you’re in foreclosure or heading that way, reach out to us for a FREE, no-obligation foreclosure consultation. We will treat you with respect while working with you to find a solution.
Understanding the Foreclosure Process in Missouri
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in Missouri works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale (aka Nonjudicial).
Connect with us by calling (636) 206-4997 or through our contact page to see if we can help with your foreclosure in St. Louis. Missouri is a Nonjudicial state, so most foreclosures do NOT use a lawsuit and court approval for the foreclosure.
In either scenario, under the Dodd-Frank Act, which started being enforced in 2014, though it was signed a few years earlier, the foreclosure process cannot begin until 120 days of being delinquent on the loan or 120 days after approving/denying an application for foreclosure alternatives, such as loan modification (if submitted prior to a foreclosure being initiated). Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Don’t let the bank take the house you’ve paid them years of interest on, leaving you with nothing. Avoid the hassle and prevent coming home to an eviction notice. We can buy your house and may even be able to put money in your pocket!
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at People First Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near St. Louis, we can help you.
We buy houses in St. Louis Missouri like yours from people who need to sell fast.
Give us a call anytime (636) 206-4997 or
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Another Foreclosure Resource For St. Louis Missouri HomeOwners: