A trustee sale is the process in which a person is removed from a property as the result of not paying the for the property. This page will address only non-judicial foreclosures, and more specifically Missouri trustee sales. It will not discuss Kansas judicial foreclosures, which are discussed in more detail on this webpage.
Frequently Asked Questions
Missouri law requires that notice be sent to the property owner via certified mail and that notice is published in the newspaper 21 days prior to the sale. Additionally, any party having an interest in the property as of the date 45 days prior to the sale is required to get notice.
Additionally, many deeds of trust may have further notice requirements that must be completed prior to conducting a trustee sale. Therefore, it is always important to review the deed of trust before starting this process.
A trustee sale can be conducted in as little as 21 days after the file is sent to the attorney. With that being said, it is usually a little bit longer due to publication deadlines in the newspaper. You should expect the sale to take place within no longer than 35 days after the file is opened (unless there are additional notice requirements in the deed of Trust).
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 trustee sale. The redemption rights in Missouri are rarely exercised as the borrower must provide notice to the trustee prior to the sale, and then post a bond with the court within 20 days following the sale. As a general statement, if the borrower doesn’t have money to pay the loan, he or she likely also does not have money to post the bond.
If the borrower does properly exercise its redemption rights, the borrower can stay in the home, rent it, or sell the redemption rights to a third party. If the home is redeemed, the purchaser gets back the money he or she paid, plus some interest.
A trustee sale 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 conducts a trustee sale, it would wipe off the second loan (assuming the second lienholder received notice). On the other hand, if the second deed of trust forecloses, the sale of the property would be subject to the first deed of trust, 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 has notice of the action so as to have an opportunity to redeem the property. Therefore, it is possible for a later filed lien to remain with the property.