Understanding Foreclosure Laws in Missouri

Most of us never envision a time when we can’t make our mortgage payments. But, sometimes, there is an unforeseen hardship or event that makes it difficult (or even impossible) to make payments. Things like losing a job, getting a divorce, or having unplanned medical bills can all make making payments on time a challenge. Foreclosure numbers are on the rise, with almost 4% of American homeowners facing foreclosure each year, with Missouri being no exception. Knowing the foreclosure laws in Missouri can mean the difference between keeping and losing your home.

What is Foreclosure?

Foreclosure happens when you can no longer make your mortgage payments. When you miss enough payments, the lender needs to take action to either force you to make payments or to take control of your home. They do this by either taking control of the property or selling the loan (or both). This is called foreclosure. In Missouri, foreclosure laws provide for both judicial and non-judicial foreclosure. Judicial foreclosure is done through the court system, while non-judicial foreclosure is carried out through the lenders (and their representatives).

Judicial and Non-Judicial Foreclosure

Missouri foreclosure laws allow for both judicial and non-judicial foreclosure. Which is used has to do with the terms set out in the mortgage. Judicial foreclosure is a legal proceeding, and goes through the Missouri court system. The lender files a complaint in court, the judge sets a time frame in which payments must be made, and if the borrower does not make the payments during this time frame, the courts sell your home in order to pay off the debt.

Under Missouri foreclosure law, this sale must be advertised for 30 days, and then the property is auctioned by the state. These auctions take place at the county courthouse and are open to the general public. Non-judicial foreclosure happens when a power of sale clause is written into a mortgage. In this clause, the borrower agrees to allow the sale of the property if they default on their loan.

Under Missouri foreclosure law, this type of foreclosure does not go through the court system. It is usually carried out by representatives of both the lender and borrower. Because most mortgages in Missouri include a power of sale clause, the majority of foreclosures under Missouri law are non-judicial. Properties for sale under non-judicial foreclosure in Missouri are also advertised for 30 days then sold through auction at the county courthouse.