If you live in Missouri and you’re behind on your mortgage payments, you’ll likely have a chance to get caught up. That's because the bank typically can't foreclose until you’re over 120 days past due and maybe even longer if you submit an application requesting a foreclosure alternative.
Once foreclosure starts, however, the process usually moves quickly.
Preforeclosure Period in Missouri
When you take out a home loan and sign a mortgage contract, you agree to make the monthly payments. If you miss a payment (even just one), you're in breach of the contract.
But the bank can’t immediately start foreclosing on your home. Under federal law, in most cases, the mortgage servicer must wait to start a foreclosure until you're over 120 days delinquent on your payment. (12 C.F.R. § 1024.41 (2024).)
This law gives you ample time to explore loss mitigation opportunities, such as a mortgage modification, short sale, or deed in lieu of foreclosure. If you submit a complete loss mitigation application during the 120-day period, the servicer can’t start the foreclosure process until:
- it determines that you don’t qualify for a loss mitigation option, and your appeal period expires
- you reject the loss mitigation option offered (or you don’t accept it before the deadline), or
- you agree to a loss mitigation option, but you violate the terms of the agreement (for example, by not making the agreed-upon payments). (12 C.F.R. § 1024.41 (2024).)
If you don’t seek a foreclosure alternative, the foreclosure can start once you’re 120 days delinquent. You can still apply for a loss mitigation option after the foreclosure starts. However, it’s usually a good idea to get the process going during the 120-day period and before you get even further behind in payments.
Understanding How Foreclosure Processes Work
In Missouri, the bank can proceed using either a judicial (court) process or a nonjudicial process that requires the bank to follow various out-of-court steps outlined in state law. Here’s a rundown of how judicial and nonjudicial foreclosures work.
Judicial foreclosure. In a judicial foreclosure, the bank has to file a lawsuit to obtain a court order to sell the home. After the court enters a judgment against the borrower, the property is auctioned off to the highest bidder, and the sales proceeds go towards paying off the loan.
Nonjudicial foreclosure. In a nonjudicial foreclosure, the bank must complete a series of out-of-court actions that the state statutes describe. Although these steps vary by state, the bank usually has to mail a notice to the borrower and publish the sale date in a newspaper. After completing the steps, the home gets sold to a new owner at a foreclosure sale.
Most banks prefer the nonjudicial procedure in Missouri because it’s quick and inexpensive.
Nonjudicial Foreclosure Process in Missouri
The bank doesn’t have to complete many steps in a Missouri nonjudicial foreclosure.
How Long Is the Foreclosure Process in Missouri?
The entire process takes about 45 to 60 days. Here’s what the bank or trustee is required to do:
- mail a notice to you (the borrower) 20 days or more before the sale, and
- publish notice of the foreclosure sale in a newspaper 20 times, for four successive issues or four weeks, depending on the circumstances. (Mo. Rev. Stat. § 443.325, § 443.320 (2024).)
Stopping the Sale by Reinstating the Loan in Missouri
If you pay the bank the entire past-due amount by a set date, you “reinstate” the loan and stop the foreclosure. Although Missouri law doesn’t provide the borrower with the right to reinstate, most Missouri mortgage contracts permit reinstatement in a nonjudicial foreclosure five days before the sale. (Check your loan documents for details.)
Or your bank might agree to let you complete a reinstatement.
Deficiency Judgments After Nonjudicial Foreclosures in Missouri
In Missouri, the foreclosing bank may get a deficiency judgment after a nonjudicial foreclosure sale by filing a separate lawsuit against the foreclosed borrower. (Mo. Rev. Stat. § 443.240 (2024).) (Banks that opt to use a judicial process to foreclose are also permitted to get a deficiency judgment.)
In some states, the deficiency judgment is limited to the difference between the fair market value of the property at the time of the sale and the total debt, even if the property sells for less than fair market value at the foreclosure sale. But in Missouri, the amount of the deficiency is almost always the total debt minus the foreclosure sale price, even in cases where the sale price is less than the fair market value of the home.
If the foreclosed borrower thinks the foreclosure sale price was inadequate and resulted in a deficiency that is unfairly large, the borrower may file a suit to void the foreclosure sale. However, a court will void the sale only if the price is so inadequate when compared to the fair market value that it “shocks the conscience” of the court and is in itself evidence of fraud. This rarely ever happens, though your case might be the exception.
If you don’t pay the deficiency judgment, the bank can generally garnish your wages, levy your bank account, or take other action to collect the amount you owe.
Getting the Home Back After the Foreclosure Sale
When you “redeem” a home, you get the property back after the foreclosure by paying the full amount of the debt plus additional costs associated with the sale. Under Missouri law, you have one year to redeem, but only if the foreclosing bank buys the property at the foreclosure sale. If someone else buys the home, you don’t get a post-sale right of redemption. (Mo. Rev. Stat. § 443.410 (2024).)
To redeem the home, you must give written notice that you plan to redeem sometime during the ten days that precede the sale or at the sale and post a bond within 20 days of the sale. (Mo. Rev. Stat. § 443.420 (2024).)
Finding Missouri's Foreclosure Laws
To look up Missouri’s nonjudicial foreclosure laws, go to the Missouri Revised Statutes (sections 443.290 through 443.440). Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consult with an attorney if you’re facing a foreclosure.