A couple of years ago I bought a home in Missouri by taking out a mortgage with an adjustable rate. The payments were affordable at first, but six months ago they increased. I fell behind and my house is being foreclosed. I read on the Internet something about “redeeming” the home, which I believe means I can get the house back after the foreclosure sale. How does this work?
Under Missouri law, foreclosed homeowners get one year to repurchase or “redeem” the home after a nonjudicial foreclosure sale, but only under certain circumstances and you must do specific things, such as giving notice that you plan to redeem before the sale even takes place. (This is discussed in more detail below.)
You Can Redeem Your Home After a Missouri Foreclosure Sale if the Lender is the Purchaser
Nonjudicial foreclosure is the most common method of foreclosure in Missouri. (This means the foreclosure takes place without court supervision.)
You have one year after a nonjudicial foreclosure sale to redeem your home, but only if the foreclosing lender is the purchaser. If a third party buys the home at the sale, you don’t get a right of redemption. (Learn more general information about the right of redemption.)
What You Must Do to Redeem the Home
If you intend to redeem the home, you must:
- give written notice of your intent to redeem to the trustee (the party conducting the nonjudicial foreclosure) within ten days before the sale or at the sale (Mo. Rev. Stat. Ann. § 443.410), and
- post a bond (and get the approval of the circuit court) within 20 days after the sale (Mo. Rev. Stat. Ann. § 443.420).
How Much You'll Have to Come Up With to Get Your House Back
To redeem, you would have to find another source of financing and then pay the full amount of the debt, plus certain additional amounts such as:
- interest (prior to and after the sale)
- various costs that the purchaser paid after the sale (such as for taxes and assessments), and
- all legal charges and costs of the sale (Mo. Rev. Stat. Ann. § 443.410).
If You Can, Work Out a Deal With the Lender Prior to the Sale
Even though you may get the chance to redeem your home after a nonjudicial foreclosure in Missouri, in most cases, it is better to take action before the foreclosure sale if you want to stay in your home. This will give you more options to save the property. For example, you could:
- catch up on the past-due amounts to reinstate the loan (and resume making your mortgage payments), or
- work out an alternative to foreclosure that allows you to remain in the home, such as a mortgage modification, forbearance agreement, or repayment plan.
Nonjudicial foreclosures in Missouri generally do not take long to complete (typically only a few months) so be sure to explore alternatives to foreclosure as early in the process as possible. (To learn more about foreclosure laws and procedures in Missouri, visit Nolo’s Missouri Foreclosure Law Center.)
Finding Missouri’s Redemption Laws
To locate the statutes that discuss your right to redeem the home in Missouri, go to Chapter 443 of the Missouri Revised Statutes.