How to avoid foreclosure in Missouri

How foreclosure works in Missouri, step by step

1. Missed payments and the demand letter

   Under a federal rule, your servicer generally cannot start foreclosure until you are more than 120 days behind. The Missouri Bar says that after about the third missed payment you can expect a demand letter that states how much you are behind and gives you 30 days to bring the loan current. The exact letter and deadline come from your deed of trust, so read it and call your servicer about options right away.

   12 C.F.R. § 1024.41(f)

2. Notice of the trustee's sale

   The trustee must mail a notice of the sale by certified or registered mail at least 20 days before the sale date, to you and to the owner shown in the county records. The notice is also published in a local newspaper. The sale can go ahead even if you never pick up the letter, so watch for certified mail and post office notices.

   RSMo §§ 443.310, 443.320, 443.325

3. Last chances before the sale

   Until the sale, you can try to work out a repayment plan, forbearance or loan modification with your servicer, or pay what is owed. If you pay the trustee before the sale, the trustee must record a certificate that releases the deed of trust. If you may want to buy the home back later, you must give the trustee written notice of your intent to redeem at the sale or within 10 days before the advertised sale date.

   RSMo §§ 443.400, 443.410

4. Trustee's sale (auction)

   The sale is a public auction held in the county where the home is, usually between 9 a.m. and 5 p.m. The trustee can put off the sale once, for up to 7 days, by announcing it at the sale. Longer or repeated delays need an agreement between you and the lender, or a new notice.

   RSMo §§ 443.310, 443.327, 443.355

5. After the sale: the one-year redemption right

   If the lender (or someone buying for the lender) is the buyer, and you gave the written notice of intent to redeem in time, you may be able to buy the home back within one year. You must post a bond approved by the circuit court within 20 days after the sale, and to redeem you must pay the debt, interest, taxes and the costs the statute lists. If someone else buys the home, this right does not apply.

   RSMo §§ 443.410, 443.420, 443.430, 443.440

6. Eviction (unlawful detainer)

   The new owner cannot remove you or your things without a court order. It must give you written notice and demand possession in writing, then file an unlawful detainer case. If it wins, the order to put the owner in possession cannot issue sooner than 10 days after the judgment. Tenants renting the home get at least 10 business days' notice first.

   RSMo §§ 534.030, 534.350

7. Possible lawsuit for the shortfall

   If the home sells for less than you owe, the lender can sue you for the difference (a deficiency). Missouri measures that shortfall from the auction price, not the home's market value, if the sale was fairly run. Talk to legal aid or a lawyer right away if you are sued.

   First Bank v. Fischer & Frichtel, Inc., 364 S.W.3d 216 (Mo. banc 2012)

Missouri foreclosure deadlines to know

These are the periods written into the law. Your own dates are on the notices you received. If a notice and this page disagree, trust the notice and ask a counselor or lawyer.

Your rights as a homeowner in Missouri

Other Missouri protections

• Mailed notice, and a way for others to get it too

  The trustee must send the sale notice by certified or registered mail at least 20 days before the sale. Anyone, such as a family member, can record a request in the county recorder's office to get a copy of any sale notice on your deed of trust, and the trustee must mail it to them if the request was recorded at least 40 days before the sale.

  RSMo § 443.325

• Six-month pause after an owner dies

  If the owner of a home with a deed of trust dies, no trustee's sale can take place within 6 months after the death. This gives the family time to sort out the estate and talk to the servicer.

  RSMo § 443.300

• Limits on the trustee's fee

  A trustee's commission is capped at 2 percent of the first $1,000 of the sale, 1 percent of the amount between $1,000 and $5,000, and one half of 1 percent above that. A trustee who takes more can be sued for double the amount taken.

  RSMo §§ 443.360, 443.370

• No lockout without a court order

  After the sale, the new owner must win an unlawful detainer case before you can be removed. Renters in a foreclosed home must get a notice, by mail and posted on the door, giving them at least 10 business days before any eviction case can be filed.

  RSMo §§ 534.030, 534.350

Missouri mortgage assistance programs

If the home is sold for more than you owe

We did not find a Missouri statute that sets a claim process for money left over after a trustee's sale. The trustee is paid a capped commission from the sale, and the deed of trust usually says how the rest of the money is paid out. Missouri Legal Services notes that the lender is often the only bidder and bids what is owed, so in many sales nothing is left over. If the home sold for more than the debt, write to the trustee named in the sale notice, ask whether any money is left after the loan, costs and other liens, and ask how to claim it. Be careful with anyone who offers to recover leftover money for a fee, and talk to legal aid first.

RSMo § 443.360

Ways to avoid foreclosure

Most of your options come from federal rules and from whoever owns or insures your loan, so they work the same way in Missouri as anywhere else. What changes by state is how much time you have to use them.

• Repayment plan
• Forbearance
• Payment deferral or partial claim
• Loan modification
• Reinstatement
• Short sale
• Deed in lieu of foreclosure
• Chapter 13 bankruptcy