 Missouri Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of Missouri.
The Process
Missouri permits two types of foreclosure:
1. Judicial, and
2. 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:
1. 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.
2. 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:
1. The borrower named in the deed of trust or mortgage at the last known
address for the borrower.
2. 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.
3. 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 someone 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.
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