Missouri Foreclosure Prevention Efforts

For 2009, Missouri ranked 28th among all states in foreclosure rate, a drop of 8.75% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.

In Missouri foreclosure proceedings can begin when borrowers are just 10 days late with their payments. Because the property title remains in trust until payment in full occurs for the underlying loan, lenders don’t need to file a lawsuit to foreclose. The entire process can take as little as 38 days.

A notice of foreclosure sale must be printed in a newspaper published in the county in which the real estate is located, at least once a week for a total of four weeks. The last publication must be not more than one week before the sale date. The homeowner must also be notified by certified mail. A foreclosure auction can be conducted on any date after notification requirements are completed.

The property can be redeemed at any time before the foreclosure sale by payment of the entire balance of the debt and expenses incurred.

In general, a deficiency judgment may not be obtained when a property in foreclosure is sold at a public auction for less than the loan amount.

Because the time line for foreclosure is so short in Missouri, it is absolutely imperative that if you foresee any problem with making your mortgage payments, you contact your lender as soon as possible to discuss your options.

• In mid July, 2009 Missouri Attorney General Chris Koster obtained restraining orders against two foreclosure consultants, US Foreclosure Relief and Gateway Mortgage Modification. They charged consumers large sums of money up front but did nothing to produce mortgage relief. For the first part of 2009, the AG received 84 complaints of mortgage relief fraud in the state. Anybody who is the victim of such a scam should call the consumer hotline at 1-(800) 392-8222 or file a complaint online at www.ago.mo.gov.
• Free legal foreclosure assistance for low income Missouri residents can be found here.
• The City of St. Louis set aside $500,000 for mortgage rescues and is credited with preventing more than 200 foreclosures.

A study by the National Consumer Law Center in February of 2009 concluded that the laws in Missouri are tilted against homeowners and that consumer protection is largely “weak or non existent.” A May 2009 McArthur Foundation study reached the conclusion that Missouri, particularly St. Louis, has lagged in foreclosure prevention efforts.

The primary response to foreclosures in the state has been to refer its citizens to Department of Housing and Urban Development (HUD) certified counseling programs.

Another good resource is to call the St. Louis Alliance for Homeownership Preservation, a network of non-profits, which can be reached by dialing 2-1-1 from a Missouri home phone or 1-(800) 427-4626 from Missouri or Illinois. When you call, please have your loan documents handy with servicer name and loan number, including any delinquency letters. You can also dial for national assistance at 1-(888) 995-HOPE

Here’s the website for the Metro St. Louis Foreclosure Intervention Task Force. You can download this free brochure about preventing home loss in St. Louis.