Foreclosure in MO, Step by Step

Foreclosure in MO usually runs through a trustee rather than a courtroom, which is why it moves faster here than in many states. The foreclosure of homes is a process with fixed steps: missed payments, a notice of default, a published notice of sale, then the trustee's sale itself. Between the first missed payment and the auction you generally have months, not days. That time is the part most owners do not realize they still hold. You can reinstate the loan, ask the lender for a modification, sell the house, or let the sale happen. Selling before the sale date keeps the decision in your hands and protects whatever equity is left in the property. If the numbers are close, it is worth reading how to sell a house before foreclosure and putting it beside an offer. If you want to see how we buy houses, that page lays out the steps and the timeline. No pressure from us either way.

As homebuyers in Missouri, we also know that many people going through the foreclosure process want to get out from under that burdensome property and wonder if they can sell their home in foreclosure.

But before we dive in...

What Is Foreclosure In Missouri 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 In Missouri

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.

Connect with us by calling (314) 334-1481 or through our contact page to have us walk you through the specific foreclosure process here locally in Missouri.

In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.

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 In Missouri?

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.

Sell My House In Missouri

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 Chris Buys Homes in St. Louis to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure and still stay in the property.

Experienced Missouri home buyers and 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 property is worth less than you owe.

If you need to sell your house in St. Louise area, we can help you. We purchase houses in Missouri like yours from people who need to sell fast.

Give us a call anytime (314) 334-1481 or fill out the form on this website today! >>

Another Foreclosure Resource For Missouri HomeOwners:

• Resources On Avoiding Foreclosure from the U.S. Government >>