Foreclosure is the process through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Chesterfield, Missouri has repeatedly failed to make their payments. When a house is foreclosed, it is normally sold at auction shortly thereafter. This is because banks normally want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy way to do this.
In all states in the U.S., including Missouri, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a reasonable effort to get a decent price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In many states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the borrower for the balance, if the sale nets less than the amount due. You should consult a Lawyer in Chesterfield, Missouri to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Missouri?
First and foremost, you should not ignore the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this might seem, you should stay in contact with your creditor, and be straightforward with them. It is important to remember that the bank does not really want your Chesterfield house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If you can't work anything out with your lender, or have become completely unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt might be forgiven. A "short refinance" might also be an option in some cases. This allows you to have some portion of the debt forgiven, while refinancing the rest.
How Can A Chesterfield, Missouri Attorney Help?
If you are facing foreclosure, a good Chesterfield, Missouri real estate Attorney can help. While keeping your home might not always be possible, a Lawyer can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.