understanding the foreclosure process

Facing foreclosure can be a daunting experience, especially if you’re unsure of the process and its implications. Understanding the foreclosure process in Kansas City can be even more daunting. In this blog post, we’ll provide a straightforward explanation of the foreclosure process in Kansas and Missouri, including what foreclosure is, the stages involved, the different types of foreclosure, and what happens after the foreclosure auction.

Foreclosure house — Foreclosure for sale

What is foreclosure anyway?

Foreclosure is a legal process that occurs when a homeowner fails to make mortgage payments as agreed upon in their loan agreement. It’s important to note that foreclosure laws and procedures can vary from state to state, so we’ll focus on Kansas and Missouri specifically.

When you know how foreclosure in KS and MO works, it provides you with the knowledge to make sure you can navigate and come out the other end as well as possible.

The Basic Stages of A Foreclosure

There are a few stages that are important to any foreclosure process and foreclosures are regulated by state laws so the process varies slightly from state to state.

Pre-Foreclosure: The foreclosure process typically begins when the homeowner misses one or more mortgage payments. During this stage, the lender will send a notice of default to the homeowner, informing them of the delinquency and the possibility of foreclosure. It’s crucial for homeowners to take action during this stage to explore options such as loan modification, short sale, or repayment plans.

Foreclosure Filing: If the homeowner doesn’t resolve the delinquency, the lender may proceed with filing a foreclosure lawsuit. In Kansas, foreclosures are primarily judicial, which means the lender must go through the court system to obtain a foreclosure order. In Missouri, foreclosures can be either judicial or non-judicial, depending on the specific circumstances outlined in the mortgage agreement.

Judicial Foreclosure:

In a judicial foreclosure, the lender files a lawsuit against the homeowner, and the case goes through the court system. The court will determine whether the lender has a valid claim for foreclosure. You will first get a letter from the court demanding payment and assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended). If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction. Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.

Non-Judicial Foreclosure:

In a non-judicial foreclosure, the lender follows a specific process outlined in the mortgage agreement or state law, without involving the court system. The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review. After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee. The trustee can then sell your property to the lender at a public auction (notice must be given).

Anyone who has an interest in the property must be notified during either type of foreclosure. For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.

What Happens After A Foreclosure Auction?

There is a redemption period in both Kansas and Missouri after the foreclosure auction. During this time, the homeowner has the opportunity to reclaim the property by paying off the outstanding debt, including any fees and costs associated with the foreclosure. The length of the redemption period can vary depending on state laws and specific circumstances.

If the homeowner does not exercise their right of redemption or fails to pay the outstanding debt within the redemption period, the new owner (often the lender) will proceed with the eviction process. The former homeowner will be required to vacate the property.

In some cases, if the sale price at the foreclosure auction does not cover the full amount owed on the mortgage, the lender may pursue a deficiency judgment. This means they can seek a court order to collect the remaining balance from the former homeowner.

Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.

Understanding the foreclosure process in Kansas and Missouri is essential for homeowners facing financial difficulties. It’s crucial to seek professional advice and explore options for avoiding foreclosure early in the process. Working with housing counselors, attorneys, or foreclosure prevention agencies can provide valuable guidance and potentially help homeowners find alternatives to foreclosure.

Generally, it’s in your best interest to avoid a foreclosure as this can impact your life for many years to come. Instead of avoiding the situation, call your lender and ask for help, or reach out to Kansas City home buyers like us at Mastiff Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.

Experienced home buyers can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe. Connect with us by calling (816) 535-0076 or through our contact page to have us walk you through the specific foreclosure process here locally in Kansas City .