A foreclosure is the process in which a person is removed from a property as the result of not paying the mortgage on the same. This page will address only judicial foreclosures, and more specifically Kansas Foreclosures. It will not discuss Missouri non-judicial foreclosures, which are referred to as Trustee Sales. More information about these types of sales can be found on this webpage.
What Notices Are Required Prior to Filing a Foreclosure?
There are no statutory notices required so looking merely at the law, the foreclosure could be filed as soon as the loan is one day late. With that being said, most mortgages will provide a notice and cure period or period of time after a borrower does not pay before a foreclosure action can be filed. Therefore, it is important to allow review the mortgage carefully before proceeding with a foreclosure.
How Long Does a Foreclosure Take?
A foreclosure is a court proceeding so the time can vary greatly depending on what response is received from the court. If there is no response and everything goes smoothly, it may be resolved within six months. On the other hand, if the borrower fights the foreclosure it may take years to get the property sold.
What Are Redemption Rights?
Redemption rights are the rights of the borrower and other parties having liens against the property to redeem or purchase back the property following the foreclosure sale. The redemption period in Kansas is usually three months but can be as long as twelve months. During this period the borrower can stay in the home, rent it, or sell the redemption rights to a third party. If the home is redeemed, the foreclosure purchaser gets back the money he or she paid, plus some interest.
Does a Foreclosure Wipe Out Other Liens Against a Property?
A foreclosure will only eliminate liens that were filed after the lien that is foreclosing and that have notice of the proceedings. In other words, if a first mortgage holder forecloses, it would wipe off the second mortgage (assuming the second mortgage was named in the foreclosure). On the other hand, if the second mortgage forecloses, the sale of the property would be subject to the first mortgage, which would remain on the property.
The remedy for a lower lienholder is to redeem the property as discussed above. In other words, if the property is worth more than the first lien, the second lienholder can buy it. If it is not worth more, than the lien did not have any value anyway. Because this is the recourse, a second or later lien is only eliminated if it is named in the foreclosure so as to have knowledge of its rights to redeem and a chance to claim that its lien was superior to the foreclosing lien. Therefore, it is possible for a later filed lien to remain with the property.
What Does the Foreclosure Process Look Like?
The most common type of foreclosure is an uncontested or lightly contested foreclosure. In these cases, the process moves along without any objection from the borrower. An overview of this process is below.
Step 1: Sign up for Guarded Pockets™
If you are not yet a member of Guarded Pockets™, the first step is to become a member. In addition to allowing us to help with your business planning, Guarded Pockets™ also provides many other benefits, including unlimited scheduled phone calls with a real estate attorney, registered agent and deed of trust trustee services, state compliance monitoring, daily REO and distressed MLS listing emails, and discounted title and real estate brokerage services. You can learn more about Guarded Pockets™ or sign up for a free trial by clicking on this link.
Step 2: Sign up for Services
Once you are a member of Guarded Pockets™, you can sign up for our services including our foreclosure-related services.
Step 3: Intake Form
In order for us to get the information we need to proceed with your trustee sale, we will ask you to complete an intake form and upload the relevant documents, such as a copy of the deed of trust and any notices you sent to the borrower. We will also need to request a title report to ensure we name all of the interested parties. It generally takes a few days to receive the title report.
Step 4: Attorney Review
During this phase, we will review the information you submitted and will also need to request a title report to ensure we name all of the interested parties.
Once this information is received, we will draft the foreclosure petition. Depending on the nature of the case, it might take a week or two for us to get the title report back and the petition filed.
Step 5: Answer/Response Period
Once the petition is filed, it is sent out for service or delivery to the borrower. This can go very quickly if the borrower resides in the home or can take some time if the borrower no longer resides in the home and needs to be located. As such service may take a week or several months.
Once the petition is served, the borrower has up to thirty days to respond. This deadline can also be easily extended. If the borrower does respond, this becomes a contested foreclosure and we will discuss the options with you. If the borrower does not respond, we request a default judgment.
Step 6: Foreclosure Judgment
Once we obtain a judgment against the borrower, there is a 14 day waiting period before we can request the sale. Once that passes, we will ask the court to enter an order to sell the home. This can take about a month. After the order is entered, we schedule the sale with the sheriff about 3-4 weeks out. Once the sale is scheduled notice is given to the borrower and posted in the newspaper for three weeks. You are not required to come to the sale, but we will need to discuss your opening bid. This can be anything up to the amount of the judgment. The higher the starting bid, the more likely you get the property. On the other hand, if it sells for less than what is owed, you will have a judgment against the borrower for the difference so it may be advantageous to start the bidding lower — especially if you do not want the property.
Step 7: Confirmation/Redemption Period
Once the sale takes place, we must file a motion to have the court confirm the sale. This is generally about 4-6 weeks after the sale. Once the sale is confirmed, the sheriff will issue a certificate of purchase to the purchaser about 1-2 weeks later. The deed is issued once the redemption period runs, which can be from 3 to 12 months after the sale.
If the sale goes for equal to or more than what the borrower owes, the sale will likely be confirmed. If the sale is for less than what is owed, an appraisal of the property must be conducted to show that it went for a fair sale price.
How Much Does a Foreclosure Cost?
We believe in fair, honest, and transparent pricing for all of our matters, and therefore, we bill foreclosure actions at a set fee per month, which includes the costs of filing the action, service, and publication, costs for summary judgment motions or other court fees,and the costs for conducting the sheriffs sale. To view our current pricing for foreclosure actions, click on this link.
Where Can I Learn About Upcoming Sales Conducted by RDRE?
We post an up-to-date list of our scheduled sales on our webpage at Upcoming Sales. The information on this webpage is pulled from our databases so it is the most current information available. If a sale is cancelled, it will be pulled from the website. If it is continued, the date will be updated. Opening bids are updated upon our receipt of the same from the lender.