Section 45 Missouri Foreclosure Procedure

• Library: Consumer Law and Practice 2010

To successfully challenge a foreclosure sale, it is important to know and understand the foreclosure process used in Missouri. The Missouri judicial foreclosure scheme is found in § 443.190-443.280, RSMo 2000. More often than not, foreclosures are conducted under a power of sale provision found in either the deed of trust or the mortgage. Missouri expressly permits foreclosure by a power of sale under § 443.290, RSMo 2000. In Federal National Mortgage Ass'n v. Howlett, 521 S.W.2d 428, 431 (Mo. banc 1975), the Court explained the evolution of nonjudicial foreclosure in Missouri, and it upheld the constitutionality of Missouri's procedures. See also AgriBank FCB v. Cross Timbers Ranch, Inc., 919 S.W.2d 263 (Mo. App. S.D. 1996) (citingFed. Nat'l Mortgage Ass'n v. Scott, 548 S.W.2d 545 (Mo. banc 1977)); Spires v. Lawless, 493 S.W.2d 65, 69 (Mo. App. S.D. 1973). And see Graham, 659 S.W.2d at 603. Section 443.320, RSMo 2000, sets forth the procedures that lenders must follow. Courts have routinely described the power of sale as a matter of contract between the parties based on the deed of trust. Ayers v. Myers, 939 S.W.2d 447 (Mo. App. W.D. 1996) (citingWinters v. Winters, 820 S.W.2d 694, 697 (Mo. App. S.D. 1991)). See also Graham, 659 S.W.2d at 603.

After a borrower has been in default for ten days, the lender must give the borrower notice in accordance with § 408.554, RSMo 2000. Section 408.554 sets forth the procedures of when and how notice of default is given. Section 408.554 provides a borrower with an opportunity to cure the default, providing as follows:

1. After a borrower has been in default for ten days for failure to make a required payment and has not voluntarily surrendered possession of the collateral, a lender may give the borrower and all cosigners on the credit transaction the notice described in this section. A lender gives notice to the borrower and cosigners under this section when he delivers the notice to the borrower or cosigner or mails the notice to him at his last known address.

2. Except as provided in subsection 4 of this section, the notice shall be in writing and conspicuously state: The name, address and telephone number of the lender to whom payment is to be made, a brief identification of the credit transaction, the borrower's right to cure the default, and the amount of payment and date by which payment must be made to cure the default. . . .

Section 408.557, RSMo Supp. 2010, requires notice before a lender sells or otherwise...