- When a property owner defaults on a mortgage, the lender has the right to sell the property to recover the debt. Foreclosure by power of sale occurs when a property is sold by the mortgage lender to pay off the debt. Proceeds of the sale go to the mortgage holder, other lien-holders and the mortgagor. For a property to be foreclosed by power of sale, the mortgage must be in deed of trust form and not in the form of an absolute deed.
- Missouri has judicial and non-judicial foreclosures. A judicial foreclosure allows the lender to proceed with foreclosure actions through the county circuit courts. Non-judicial foreclosures are foreclosures by power of sale. A majority of foreclosures in Missouri are non-judicial. Missouri is a state that allows the use of deeds of trust to secure real estate. The lender may foreclose on the deed of trust and sell the property once the owner fails to pay mortgage obligations.
- The Missouri foreclosure process typically takes 60 days. A foreclosure sale can be conducted after the default notice is sent to the property owner. After the notice is sent, the lender must publish a notice of sale in a newspaper in the county where the property is located once a week for a total of four weeks. The notice of sale must be sent to the property owner by certified or registered mail at least 20 days before the foreclosure sale. Notice must also be sent to the IRS at least 25 days before the foreclosure sale if an IRS notice of lien has been filed on the property. The foreclosure time line can be interrupted if the property owner files for bankruptcy or passes away.
- Property owners have certain rights to redeem their property before it is sold. A statutory redemption allows a property owner to redeem the property at any time before the sale by paying the entire balance of the debt plus the foreclosure expenses that have incurred.
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