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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

Missouri

SECURITY INSTRUMENT USED: Deed of trust with non-judicial power of sale by trustee.

SECURITY INSTRUMENT USED

RECORDING REQUIREMENTS: Instrument must be acknowledged before a notary public. RSMo. &sect;&sect;&nbsp;442.130 and 442.150. Witnesses are not required. The instrument must be recorded in the county where the land is located. (Note that the City of St. Louis is considered a county for these purposes, separate from St. Louis County.) If the land is located in more than 1 county, the instrument must be recorded in each county. RSMo. &sect;&nbsp;59.510. See generally RSMo. &sect;&sect;&nbsp;59.310-.510. Documents that do not comply with the following requirements may be refused by the county Recorder of Deeds: (1)&nbsp;the document shall consist of 1 or more individual pages printed only on 1 side and shall not have any attachment stapled or otherwise affixed to any page except as necessary to comply with statutory requirements; provided that a document may be stapled together for presentation for recording; (2)&nbsp;the size of print or type shall not be smaller than 8-point type and shall be in black or dark ink; (3)&nbsp;the document must be of sufficient legibility to produce a clear and legible reproduction thereof; (4)&nbsp;the document shall be on white paper or light-colored of not less than 20-pound weight without watermarks or other visible inclusions, except for plats and surveys; (5)&nbsp;all signatures on a document shall be in black or dark ink and shall have the corresponding name typed, printed, or stamped underneath said signature; and (6)&nbsp;the documents shall have a top margin of at least 3&rdquo; of vertical space from left to right, to be reserved for certification and use by the Recorder of Deeds. All other margins shall be a minimum of &frac34;&rdquo; on all sides. RSMo. &sect;&nbsp;59.310.1. Except for plats and surveys, pages may not exceed 8&frac12;&rdquo; wide and 11&rdquo; tall. RSMo. &sect;&nbsp;59.005(8). Every document that is presented for recording, except plats and surveys, shall have the following information on the first page below the 3&rdquo; horizontal margin: (1)&nbsp;the document&rsquo;s title; (2)&nbsp;the document&rsquo;s date; (3)&nbsp;all grantors&rsquo; names; (4)&nbsp;all grantees&rsquo; names; (5)&nbsp;any statutory addresses; (6)&nbsp;the legal description of the property; and (7)&nbsp;reference book and pages for statutory requirements, if applicable. RSMo. &sect;&nbsp;59.310.2. If there is not sufficient room on the first page for all of the information required by this subsection, the page reference within the document where the information is set out shall be stated on the first page. Documents not meeting these criteria may face an additional recording fee of $25. RSMo. &sect;&nbsp;59.310.3. Documents that are exempt from format requirements and that may be recorded include: (1)&nbsp;documents that were signed prior to January&nbsp;1, 2002; (2)&nbsp;documents executed outside the United States; (3)&nbsp;certified copies of documents, including birth and death certificates; (4)&nbsp;any document where one of the original parties is deceased or otherwise incapacitated; and (5) judgments or other documents formatted to meet court requirements. RSMo. &sect;&nbsp;59.310.4. The Recorder shall not record a deed that does not have a legal description or a mailing address of at least 1 grantee. However, the failure to have a mailing address or legal description does not invalidate a deed or affect any statutory constructive notice. RSMo. &sect;&nbsp;59.330.2. Corporate deeds must have the name of the corporation, must be signed by the president or presiding member or trustee or an officer authorized by resolution, must have the corporate seal affixed (if the corporation has a seal), and must be acknowledged. RSMo. &sect;&nbsp;442.060 and RSMo. &sect;&nbsp;442.210.2. Certificates of acknowledgment shall state that the person signing was personally known to be the person signing the document or was proved to be the person by at least two&nbsp;witnesses, whose names and places of residence shall be inserted in the certificate. Missouri provides statutory forms of notary blocks&nbsp;that are permitted, but not required, to be used for natural persons, natural persons acting by attorney, corporations or joint stock associations, including variations for a corporation depending on whether the corporation has a corporate seal or not.&nbsp;RSMo.&nbsp;&sect; 442.210. Missouri recognizes the validity of acknowledgments without the state and within the United States by any notary public or by any court of the United States or of any state or territory, having a seal, or the clerk of any such court. Missouri also recognizes the validity of acknowledgements without the United States by any court of any state, kingdom or empire having a seal or the mayor or chief officer of any city or town having an official seal or by any minister or consular officer of the United States or notary public having a seal.&nbsp;RSMo.&nbsp;&sect; 442.150. The St. Louis City Recorder is unique among Missouri&rsquo;s Recorder offices. In addition to the state requirements, the City Recorder must comply with ordinances passed by the Board of Aldermen. For example, all deeds or other conveyances of lands situated in the City of St. Louis, including all warranty deeds (general or special), quitclaim deeds and deeds of trust, but excluding all easements and rights-of-way, contain the notarized signatures of all parties to a document, both grantor and grantee, and the grantor&rsquo;s residence address. Chapter 15.152.030, St. Louis Revised Code. Deeds of trust, easements, and rights-of-way are exempt from the grantee signature requirement. See also &sect;&nbsp;59.313, RSMo. (2016). The St. Louis City (which is not part of St. Louis County) Recorder is unique among Missouri&rsquo;s Recorder offices. In addition to the state requirements, the City Recorder must comply with ordinances passed by the St. Louis City Board of Aldermen. For example, all deeds or other conveyances of lands situated in the City of St. Louis, including all warranty deeds (general or special), quitclaim deeds and deeds of trust, but excluding all easements and rights-of-way must contain the residence address of the grantor and must be signed and notarized by all of the grantees (excluding in the case of deeds of trust, all lenders and trustees). Chapter 15.152.030, St. Louis Revised Code. See also RSMo. &sect;&nbsp;59.313. All documents that transfer real estate ownership in the City of St. Louis must also be accompanied by a Certificate of Value form at the time of recordation. The Certificate of Value form must by filled out by the buyer or their agent and list the full consideration paid. Certificates of Value are also required in certain counties in Missouri (e.g. &ndash; City of St. Louis, St. Louis County, St. Charles County and Jackson County). The Missouri legislature has from time to time considered requiring Certificates of Value throughout the State. Parties are cautioned to make inquiry with the applicable county recorder of deeds office to determine the applicable county requirements.

RECORDING REQUIREMENTS

STATUTES TO BE WAIVED: None.

STATUTES TO BE WAIVED

UNUSUAL TREATMENT OF STANDARD PROVISIONS: No fees of any nature may be charged on any residential real estate loan except a 1% origination fee, and if the loan is for the construction, repair and/or improvement of residential real estate, a 1% fee for inspection and disbursement, except in the case of loans guaranteed by a federal agency or sold into the secondary markets to certain specified entities. Bona fide expenses paid by the lender to any person not an officer, employee or director of the lender or any business in which any officer, employee or director of the lender owns any substantial interest&nbsp;may be included. RSMo. &sect;&nbsp;408.052. Prepayment penalties are not authorized for residential real estate loans paid after 5 years from the origination date. Otherwise, the maximum penalty authorized is 2% of the balance at the time of prepayment or 2% of the average daily balance during the 6-month period prior to prepayment, depending on the circumstances. RSMo. &sect;&nbsp;408.036. Business and corporate loans are not subject to this section. Missouri defines &ldquo;residential real estate&rdquo; to be any real estate used or intended to be used as a residence by not more than four families, one of whom is the borrower. RSMo. &sect;&nbsp;408.015(6). A &ldquo;residential real estate loan&rdquo; is one made for the acquisition, construction, repair or improvement of or secured by residential real estate or any loan made to refinance such a loan. RSMo. &sect;&nbsp;408.015(7). Under Missouri law there is no requirement that escrow accounts bear interest. As between the parties, the assignment of a note secured by a mortgage carries the security interest with it, and no mortgage assignment is required. However, to protect an assignee&rsquo;s priority on transfer, a recorded assignment is necessary. Any person who acquires an interest in real property for value and without notice of an unrecorded assignment of a security instrument and who has relied upon a release of such security instrument executed by the party last shown of record to be the owner shall acquire the interest in such real property free from the lien of such security instrument. RSMo. &sect; 443.035.2. All security instruments and assignments shall contain the mailing address of the mortgagee, cestui que trust, or assignee. RSMo. &sect;&nbsp;443.035.3. The &ldquo;Collateral Protection Act&rdquo; at RSMo. &sect;&sect;&nbsp;427.110-.190, provides a statutory notice to the debtor that may be used by a lender to obtain insurance subsequent to the date of the loan to provide the lender monetary protection against loss or damage to its collateral or against liability arising out of ownership or use of its collateral at the debtor&rsquo;s expense. The Act provides a statutory notice from the creditor needs to include in the credit agreement in order to enjoy the protections of the Act. RSMo. &sect; 427.120.

UNUSUAL TREATMENT OF STANDARD PROVISIONS

SECURING FUTURE ADVANCES: Future advances are permitted and mortgages and deeds of trust may secure future advances, whether the advances are optional or obligatory on the part of the lender. The fact that the instrument secures future advances must be clearly stated within the body of the instrument or within the body of an amendment to the instrument if the purpose of the amendment is to cause the instrument to secure future advances. The instrument must state the face amount. The total principal amount of obligations secured by the instrument may decrease (even down to zero) or increase from time to time, but may not exceed the face amount stated in the instrument, except for future advances made for the reasonable protection of the lender&rsquo;s security interest (see below). The instrument must clearly state that it is governed by RSMo. &sect;&nbsp;443.055. The owner of the interest in the real property encumbered by the security instrument (not including the trustee, mortgagee, or beneficiary under a deed of trust) has the right to notify the lender that the owner elects to terminate the operation of the instrument as security for future advances or future obligations made or incurred after the date the lender receives the notice. Receipt of the notice triggers an obligation on the part of lender to record a statement setting forth the date notice was received and the total principal amount of debt as of such date. RSMo. &sect; 443.055(6). If an amendment increases the total amount of obligations secured by the instrument, the priority of subsequent advances that exceed the original face amount dates back to the date of recordation of the amendment, not the date of recordation of the instrument. RSMo. &sect; 443.055(5). Any advance of funds, whether under a note, contract, guarantee or other evidence of indebtedness can be considered a future advance for purposes of RSMo. &sect; 443.055. Part of Chapter 443 has been adopted to authorize reverse mortgages. There are numerous requirements and limitations placed on the banks, credit unions, licensed brokers, and savings associations in making these loans. The statute specifically provides for lien priority for cash advances under a reverse mortgage over subsequently filed liens, mortgages, or deeds of trust. RSMo. &sect;&sect;&nbsp;443.901 &ndash; 443.912.

SECURING FUTURE ADVANCES

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL, INCLUDING PAYMENT OF TAXES AND INSURANCE: If an advance is made to protect the lender&rsquo;s security interest in the real property (for example, advances for real property taxes, hazard insurance premiums, certain assessments or maintenance charges, reasonable repairs and maintenance, amounts due under prior mortgages or deeds of trust, leases, or other encumbrances, and reasonable costs and attorneys&rsquo; fees incurred in enforcing the instrument or the indebtedness it secures) or to complete improvements under construction loan contracts, then the advance may exceed the face amount of the instrument and still have priority that relates back to the date of recording of the instrument. RSMo. &sect;&nbsp;443.055.3. A Missouri Court of Appeals has confirmed that interest also can exceed the stated amount and remain secured, and property taxes and attorney&rsquo;s fees may also be secured as advances for the protection of the security interest. Late fees, however, do not qualify as expenses protecting the lien. Manns v. SB RE Properties, LLC, et al., ED105820 (Mo. Ct. App. E. D. Mo., Nov. 13, 2018).

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL, INCLUDING PAYMENT OF TAXES AND INSURANCE

CORPORATE OR INDIVIDUAL: No foreign corporation or individual shall act as trustee in any security instrument unless a co-trustee is named that is a corporation organized under the law of the State of Missouri or an individual citizen of the State of Missouri. RSMo. &sect;&nbsp;443.350. For definition of &ldquo;foreign entity&rdquo; see RSMo. &sect;&nbsp;362.600.

CORPORATE OR INDIVIDUAL

SUCCESSOR TRUSTEE: The sheriff or some suitable person can be appointed as successor trustee per statute by the circuit court, RSMo. &sect; 443.340, or by the mortgagee if provided in the deed of trust instrument.

SUCCESSOR TRUSTEE

RESIDENCY REQUIRED: See above.

RESIDENCY REQUIRED

BRIEF DESCRIPTION OF PROCEDURE: Nearly all foreclosures in Missouri occur by non-judicial foreclosure pursuant to a deed of trust that permits same. A non-judicial foreclosure sale is conducted in the jurisdiction where the land is situated following notice and publication completed in accordance with the terms of the deed of trust and applicable law. Note that the City of St. Louis is a separate political subdivision not within a County. The trustee must give certain parties entitled to notice at least 20 days&rsquo; prior written notice of sale. RSMo. &sect;&nbsp;443.310. This notice must set forth the date; book and page of the recording of the deed of trust; the grantors; the time, the place and the terms of sale; as well as a legal description of the property. RSMo. &sect;&nbsp;443.320. In counties and cities of 50,000 inhabitants or more, the advertisement must be inserted in a daily newspaper circulated in that county and must appear at least 20 times up to the sale date and on the sale date. In all other counties, the notice must be given by advertisement in a newspaper published at least weekly in such county for 4 successive issues, appearing on the same day of each week, the last publication to be not more than 1 week prior to sale. If no such paper exists in the county, then it is to be published in the newspaper published nearest thereto in the state. Id. The trustee, in the trustee&rsquo;s discretion, may grant 1 continuance of the sale not to exceed 7 days without an additional notice by announcing the continuance at the day, time, and place of sale. RSMo. &sect;&nbsp;443.355. By mutual agreement the owner of the land and the holder of the security instrument may agree to more than 1 continuance or continuances for more than 1 week. Whether such agreement is binding on other parties holding liens or other interests in the property is unclear. Local customs exist concerning the time of day and the location of sale, but the time for sale will be deemed commercially reasonable if held between the hours of 9:00 a.m. and 5:00 p.m. on the date of sale. RSMo. &sect;&nbsp;443.327. See generally RSMo. &sect;&nbsp;443.290 et seq. Judicial foreclosure in Missouri is rare and there are very few reported cases on judicial foreclosure of real estate.

BRIEF DESCRIPTION OF PROCEDURE

TYPICAL LENGTH OF PROCEDURE: The minimum length of time to complete a non-judicial non-residential foreclosure is 30 to 45 days. If the foreclosure is on a debtor&rsquo;s residence and the property is covered by RESPA and the rules of the Fair Debt Collection Practices Act, the notice of acceleration of the indebtedness, and other necessary notices to be given, 90 to 120 days is a more reasonable period from the commencement of the calling of the debt to the time of foreclosure.

TYPICAL LENGTH OF PROCEDURE

SPECIAL FORECLOSURE MATTERS: The application by the trustee of the proceeds of any foreclosure sale is determined by the terms of the credit and mortgage instruments. Usual priorities are (1)&nbsp;the payment of the expenses of the foreclosure, including attorneys&rsquo; fees, (2)&nbsp;the payment of accrued interest, (3)&nbsp;the payment of principal, and (4)&nbsp;the payment of any excess, if there is an excess, to the party legally entitled thereto, which depending on the circumstances may be the property owner, or a junior lienholder. Though not required by law, the trustee will typically provide an accounting on the back side of the note setting forth the sale proceeds, amount of outstanding debt, and certain expenses. The foreclosure law permits anyone to file with the Recorder of Deeds a Request for Notice of foreclosure. The request shall specify the name and address of the party to whom the notice is to be mailed, the names of the parties to the deed of trust or mortgage, the legal description of the land at issue, and the book and page where the same is recorded or the recorder&rsquo;s number. The request shall include a signature and acknowledgment. A form of notice is provided in RSMo. &sect; 443.325. If such a Request for Notice of Foreclosure is filed at least 40 days before the foreclosure sale, the trustee is required to give such notice. Id. It is customary to conduct a title search to determine if there is any Internal Revenue Service or Missouri Department of Revenue lien against the owner of the property. If so, the necessary 25-day notice is to be given to the Internal Revenue Service with respect to the foreclosure. If the deed of trust meets the requirements of a security agreement under the Missouri Uniform Commercial Code (UCC), the trustee may sell personal property and/or fixtures at a foreclosure sale under the deed of trust along with the real property through the real property foreclosure process. RSMo. &sect;&nbsp;400.9-604. If that is the intent, it is advisable to include in the notice of foreclosure that all property secured by the deed of trust will be sold RSMo. &sect; 400.9-613. The UCC may require different actions for a commercially reasonable sale of personal property under the UCC.

SPECIAL FORECLOSURE MATTERS

FORECLOSURE BID REQUIREMENTS: There are no specific state statutory foreclosure bid requirements. However, common law may impose limits (such as limiting a trustee from bidding at a sale) and should be reviewed and considered in planning.&nbsp;

FORECLOSURE BID REQUIREMENTS

REDEMPTION PERIOD AND PRICE: Certain redemption rights are afforded&nbsp;by statute. RSMo. &sect;&sect;&nbsp;443.410-.440. Statutory redemption rights are available only if the grantor of the deed of trust (or anyone entitled through the grantor to redeem) gives written notice to the party conducting the sale, at the sale or within 10 days before the advertised date of the sale, of an intent to redeem. The statutes also provide that if the foreclosure is by decree of court there shall be no redemption.&nbsp; If proper statutory notice is given, and the beneficiary of the deed of trust is the successful bidder at the sale (but not where a third party purchases the property), then the property is subject to redemption. This statue is rarely used because in addition to notice, statutory redemption requires the posting of an appropriate court-approved bond for the protection of the holder of the indebtedness during the year after the foreclosure sale against, among other things, interest to accrue, legal fees and charges, costs of sale, damages, and waste. If proper notice and bond, as approved by the court, is posted within 20 days after the sale, then the party redeeming will have 1 year in which to redeem by paying the full amount of the indebtedness. There is no case authority recognizing that the statutory right may be waived by the grantor of the deed of trust in the deed of trust itself. The general rules of equity are sometimes used to set aside foreclosures. An action to set aside a foreclosure is technically not a redemption. Such actions are usually founded in fraud or other wrongful conduct.

REDEMPTION PERIOD AND PRICE

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD: This is not addressed by statute. Whether a contractual waiver of statutory or other redemption rights could be enforceable under certain circumstances would require review of case law&nbsp;as of the time of the&nbsp;applicable event(s).&nbsp;

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

DEFICIENCIES: Collection of deficiencies for non-demand instruments is covered by the 10-year general statute of limitations for written instruments. RSMo. &sect;&nbsp;516.110. The deficiency amount is determined by the amount of the debt and all expenses as called for by the applicable financing documents, less the amount bid by the successful bidder at the sale, which may include the holder of the indebtedness. A suit on the credit instrument(s) and any related guaranty may be commenced prior to foreclosure; foreclosure may be conducted during the suit, and the successful foreclosure bid amount will be deducted from any judgment obtained in the suit. More typically, the deficiency claim is brought after foreclosure. Note that statute of limitations for a demand note begins to run as of the date of the note.

DEFICIENCIES

EFFECT OF FORECLOSURE ON LEASES: Real property interests arising under leases in force and effect (evidenced by a recorded memorandum or of which the lender has knowledge) prior to the date a deed of trust is recorded are superior in priority, unless subordinated to the deed of trust being foreclosed. Real property interests under leases entered into after the date the deed of trust is recorded will be generally extinguished by a successful foreclosure; provided, however, as noted below, parties in possession may impart constructive notice and priorities of rights of tenants and a mortgagee may be re-ordered on that basis. The customary practice is for a lessee to agree in writing to attorn to a party who successfully forecloses in the event the lease is superior to the deed of trust; and the usual practice for lenders is to agree to allow a lessee to continue to occupy the premises under the lease&rsquo;s terms if such lessee agrees to continue the lease and continue to be bound by the lease&rsquo;s terms in the event of foreclosure. Leases need not always be in writing to be enforceable (e.g., leases of less than a year may be exempt from the statute of frauds) RSMo. &sect;&nbsp;432.010. Possession of the premises by the lessee is notice of the lessee&rsquo;s rights and may result in such lease being superior to a subsequent deed of trust.

EFFECT OF FORECLOSURE ON LEASES

USURY CEILING: There is no limit on interest for loans to corporations, general partnerships, limited partnerships, or limited liability companies, business loans of $5,000 or more; real estate loans other than residential real estate loans and loans of less than $5,000 secured by real estate used for agricultural activity; or loans of $5,000 or more secured only by stocks, bonds, bills of exchange, certificates of deposit, warehouse receipts, or bills of lading. See RSMo. &sect;&nbsp;408.035. Other loans may carry a maximum interest rate of 10%, but the parties can agree in writing to a rate of interest not exceeding the &ldquo;market rate,&rdquo; which is the monthly index of long-term U.S. government bond yields plus 3%. Such rate is fixed by the Missouri Director of the Division of Finance on or before the 20th day of the last month of each calendar quarter for the following quarter. See RSMo. &sect;&nbsp;408.030. Alternatively, RSMo. &sect;&nbsp;408.231 et seq., dealing with second-mortgage residential loans, allows interest rates to be received in any manner and at rates agreed to by the parties on the unpaid balance, subject to various restrictions on fees and other matters. When no rate is agreed upon, creditors are entitled to receive interest at a rate of 9%. See RSMo. &sect;&nbsp;408.020. Similarly, all judgments bear interest at a rate of 9% unless a lawful rate was specified in writing. If usurious interest has been collected, it does not avoid the debt. Any excess over the legal rate is applied to the principal. A corporation cannot interpose a defense of usury. See RSMo. &sect;&nbsp;408.060. Usury invalidates any security interest in personal property to secure the loan. See RSMo. &sect;&nbsp;408.070.

USURY CEILING

USURY EXCEPTIONS: See above.

USURY EXCEPTIONS

LOCATIONS FOR FILING: For real property, financing statements are to be filed in the office designated for the filing or recording of a mortgage on the related real property. The same is true if the collateral is timber to be cut or as-extracted collateral, or if the financing statement is filed as a fixture filing. See RSMo. &sect;&nbsp;400.9-501. The proper place to file a personal property security interest will be (a)&nbsp;in the state of the debtor&rsquo;s principal residence if the debtor is an individual, (b)&nbsp;in the state of registration or organization if the debtor is a registered organization (e.g., corporation, limited liability company, etc.), or (c)&nbsp;if the debtor is not a registered organization (i.e., a general partnership), in&nbsp;the state of the debtor&rsquo;s sole place of business, or if the debtor has more than one place of business, at its&nbsp;chief executive office.&nbsp;See&nbsp;RSMo.&nbsp;&sect; 400.9-301 and &sect; 400.9-307. If Missouri is the proper state in which to file a personal property security interest, all such financing statements must be filed with the office of the Secretary of State. For filings related to transmitting utilities,&nbsp;see&nbsp;RSMo.&nbsp;&sect; 400.9-501(b).

LOCATIONS FOR FILING

SECURITY INSTRUMENTS USED AS FIXTURE FILINGS: A deed of trust may be effective as a fixture filing so long as it states that it covers fixtures, relates to the real property covered by the deed of trust, and otherwise complies with statutory requirements for fixture filings and deeds of trust. See RSMo. &sect;&nbsp;400.9-502(c).

SECURITY INSTRUMENTS USED AS FIXTURE FILINGS

UNUSUAL PROVISIONS OR REQUIREMENTS: A guaranty is a contract and, unless adequate waivers are obtained from the guarantor, a guarantor is not liable if the principal debtor is not liable. Continuing guaranties may be limited in amount. Unless adequate waivers are obtained from the guarantor, alteration of the principal contract (including, for example, changes in interest rate) discharges a guarantor. Reduction of debt reduces the guaranty.

UNUSUAL PROVISIONS OR REQUIREMENTS

SPECIAL PROBLEMS IN ENFORCEMENT OF GUARANTY: Unless the right to require suit against the principal debtor has been adequately waived, a surety/guarantor for payment of money or delivery of property by another, may, at any time after an action has accrued thereon, give written notice to the claimant, by delivering a copy to the claimant, or leaving a copy at the claimant&rsquo;s usual place of abode with some person of the family over the age of 15 years, and require that the claimant bring suit against the principal debtor and other parties liable. If such suit is not commenced within 30 days of notice and proceeded with in due diligence, the surety/guarantor is discharged. See RSMo. &sect;&sect;&nbsp;433.010-.030.

SPECIAL PROBLEMS IN ENFORCEMENT OF GUARANTY

OBTAINING DEFICIENCY JUDGMENTS: Deficiency judgments may be obtained against a guarantor. These claims typically are brought after foreclosure, but a suit against a guarantor may be brought prior to foreclosure, and the successful bid amount from any subsequent foreclosure will reduce the obligation and set the deficiency amount. No fair value hearing is required to establish the guarantor&rsquo;s liability, and the foreclosure sale price is deemed conclusive for the purpose of determining the deficiency amount.

OBTAINING DEFICIENCY JUDGMENTS

STATUTE OF LIMITATION PERIOD: The statute of limitation is 10 years on written instruments, including promissory notes. See RSMo. &sect;&nbsp;516.110. Stating the maturity date in the deed of trust is not required by law, but disclosure of the maturity date in the instrument ties to the statute of limitations so some lenders opt to recite the date in the instrument. Foreclosure is barred in any event (as to a deed of trust that does not secure future advances as provided under RSMo. &sect;&nbsp;443.055) after the lapse of 20 years from the date at which the last maturing obligation secured by the instrument sought to be foreclosed is due on the face of such instrument, unless an affidavit of the amount due has been recorded within such 20-year period. See RSMo. &sect;&nbsp;516.150. Whenever under the provisions of &sect;&nbsp;516.150 &ldquo;the date at which the last maturing obligation secured by the instrument sought to be foreclosed is due&rdquo; cannot be determined from the instrument, the 20-year period begins to run on the recited date of execution, or if there is no recited date, the date of acknowledgment of the instrument, or if there is neither a recited date of execution nor a date of acknowledgment, the date of recording, or if there is none of the above, the original date of the secured obligation. With respect to a deed of trust securing future advances, the 20-year period referred to in RSMo. &sect;&nbsp;516.150 shall begin to run on the twentieth anniversary of the recited date of execution of such security instrument, or if there is no recited date, the date of acknowledgment of such security instrument, or if there is neither a recited date of execution nor a date of acknowledgment, the date of recording of such instrument. See RSMo. &sect;&nbsp;516.155.

STATUTE OF LIMITATION PERIOD

REQUIREMENTS FOR RELEASE OF LIEN: Releases of mortgages and deeds of trust must be by a sufficient deed of release, which must be acknowledged in the same form as other deeds. Specific rules for release of deeds of trust recorded prior to 1986 are set forth in RSMo.&nbsp;&sect;&sect; 443.060, 443.070 and 443.090. The deed of release for satisfaction of a deed of trust must be executed by the mortgagee, but it is not necessary for the trustee to execute the deed of release. See RSMo. &sect;&nbsp;443.060. If the secured party, upon full payment, does not submit the deed of release for recording within 45 days of request and tender of costs, the secured party is liable to the mortgagor for the lesser of $300 per day for each day after such 45th day or 10% of the amount of the security instrument, plus court costs and attorneys&rsquo; fees, if any. See RSMo. &sect;&nbsp;443.130. The secured party has 60 days following rejection of a deed of release to submit a recordable and sufficient deed of release. Id. To qualify under &sect; 443.130, the mortgagor or its agent shall provide the request in the form of a demand letter to the secured party by certified mail, return receipt requested, or other form that provides evidence of the date of notice receipt. The demand letter shall include sufficient evidence the debt was satisfied and that the expense of filing and recording the release was advanced. See RSMo. &sect;&nbsp;443.130.2.&nbsp;

REQUIREMENTS FOR RELEASE OF LIEN

HOMESTEAD ISSUES: Husband and wife can jointly encumber homestead property. Homestead applies to a dwelling house and appurtenances and the land used in connection with the dwelling house. The homestead, together with the rents, issues and products thereof, shall be exempt from attachment and execution. Whether allowed for a single owner or in the aggregate for more than one owner, the value cannot exceed $15,000. See RSMo. &sect;&nbsp;513.475.

HOMESTEAD ISSUES

COMMUNITY PROPERTY: Missouri is not a community property state.

COMMUNITY PROPERTY

MORTGAGE TAX: There is no mortgage registration tax in Missouri.

MORTGAGE TAX

DOCUMENTARY STAMP TAX: There is no documentary stamp tax on notes or in the event of foreclosures.

DOCUMENTARY STAMP TAX

TRANSFER TAX: There is no transfer tax on sale of real property, a foreclosure sale or on deeds in lieu of foreclosure. We note that an increasing number of local jurisdictions require a certificate of value (or similar form) to be provided with any deed being presented for recordation.

TRANSFER TAX

ENFORCEABILITY OF AGREEMENT OF BORROWER AND LENDER AS TO CHOICE OF LAW PROVISIONS: Missouri generally allows the parties to agree if some element of the contract bears a reasonable relation to the state selected. See RSMo. &sect;&nbsp;400.1-301. See also State ex rel. McKeage v. Cordonnier, 357 S.W.3d 597, 600 (Mo. 2012).

ENFORCEABILITY OF AGREEMENT OF BORROWER AND LENDER AS TO CHOICE OF LAW PROVISIONS

RECEIVER AVAILABLE: Any circuit court or a judge in vacation has power to appoint a receiver whenever such appointment is deemed necessary. Such action is permitted by Rules of Civil Procedure, Rule 68.02 and RSMo. &sect;&nbsp;515.510. The receiver is to keep, preserve, and protect any money, business, business interest or other property entrusted to the receiver pending any legal or equitable proceeding concerning the property, in all cases subject to the order of the court (Rule 68.02; RSMo. &sect;&nbsp;515.545 et seq.). The receiver&rsquo;s compensation is fixed by the court and is treated as costs in the proceeding or charged upon the parties as the court may direct. (Rule 68.02).

RECEIVER AVAILABLE

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES: See &ldquo;UNUSUAL TREATMENT OF STANDARD PROVISIONS.&rdquo;

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES

LENDER QUALIFICATIONS AND/OR LICENSURE: Residential mortgage loan brokers are required to obtain a license from the director of the division of finance. RSMo. &sect;&nbsp;443.805. See generally RSMo. &sect;&nbsp;443.701 et seq. Most banks, credit unions, and savings and loans, as well as certain others, are exempt by definition. RSMo. &sect;&sect;&nbsp;443.805 and 443.703(10). See also RSMo. &sect;&nbsp;443.706.3.

LENDER QUALIFICATIONS AND/OR LICENSURE

MODIFICATION: No unusual requirements for modifying existing mortgages.

MODIFICATION

PERFECTING LIENS IN MANUFACTURED HOMES: A lien or encumbrance on a manufactured home is perfected by the delivery to the director of revenue of a notice of lien in a format as prescribed by the director of revenue. Subject to certain exceptions, the lien or encumbrance is perfected as of the time of its creation if the delivery of the notice of lien is completed within 30 days; otherwise it is perfected as of the time of delivery. The notice shall contain the name and address of the owner of the manufactured home and the secured party, a description of the manufactured home, including any identification number and other information required by the department of revenue. See RSMo. &sect;&nbsp;700.350. Subject to certain provisions, whether a manufactured home is subject to a lien or encumbrance shall be determined by the laws of the jurisdiction where the manufactured home was when the lien or encumbrance attached. See id. Liens on manufactured homes may secure future advances. See id. The owner of a manufactured home may convert the manufactured home to real property by attaching the home to a permanent foundation situated on real estate owned by the manufactured home owner and removing or modifying the transporting apparatus including but not limited to wheels, axles and hitches rendering it impractical to reconvert the real property thus created to a manufactured home. See RSMo. &sect;&nbsp;700.111. Conversion to real property also requires an affidavit of affixation be recorded and then filed with the Director of Revenue along with a surrender of the certificate of origin or certificate of title.

PERFECTING LIENS IN MANUFACTURED HOMES

LEGAL OPINIONS: The Missouri Bar Association has not issued a bar opinion report regarding standard accepted opinion practices.

LEGAL OPINIONS

ENVIRONMENTAL LIEN LAW ISSUES: Missouri has not adopted the Uniform Federal Lien Registration Act (UFLRA) although certain provisions of state law are similar to provisions of the UFLRA. Environmental liens are filed in the Recorder&rsquo;s Office of the county in which the property is located. Environmental liens may also be filed in the U.S. District Court for the district in which the property is located. Missouri does not have a statute imposing a super-priority lien for clean-up of hazardous waste.

ENVIRONMENTAL LIEN LAW ISSUES

INCEPTION OF LIEN: A mechanic&rsquo;s lien attaches to the land, buildings, bridges, or other improvements and is preferred to all other encumbrances that attach to or upon the land, buildings, bridges, or other improvements subsequent to the commencement of construction. See RSMo. &sect;&nbsp;429.060; see also Drilling Service Co. v. Baebler, 484 S.W.2d 1, 9 (Mo. 1972). Though deeds of trust recorded prior to construction generally have priority over mechanic&rsquo;s liens as to the land upon which the improvements are erected, a lender can waive that priority by its conduct, including involvement in the construction. See, e.g., Dave Kolb Grading Inc. v. Lieberman Corp., 837 S.W.2d 924, 935 (Mo. App. 1992). Generally, as to the buildings, erections, or improvements for which they were furnished or the work was done, a mechanic&rsquo;s lien takes preference over any (prior or subsequent) lien, encumbrance, or mortgage upon the land, buildings, erections, improvements, or machinery. See RSMo. &sect;&nbsp;429.050. However, this rule applies only to new construction and does not apply to improvements or repairs of existing structures; thus, where a prior mortgage was given upon land and an existing structure, a mechanic&rsquo;s lien arising incident to improvement or repair of the existing structure has no priority over the mortgage. See RSMo. &sect;&nbsp;429.050; Trouts Investments, Inc. v. Davis, 482 S.W.2d 510 (Mo. App. 1972). A title insurance endorsement for every construction draw is necessary. There is no law or custom regarding recording a notice of commencement of construction. However, for new residential construction, contractors and subcontractors are required to record a &ldquo;Notice of Rights&rdquo; not less than 5 days prior to an intended sale (assuming the owner or lender files a &ldquo;Notice of Intended Sale&rdquo;) for the contractor or subcontractor to preserve its lien rights. RSMo. &sect;&nbsp;429.016.3.

INCEPTION OF LIEN

PRIORITY AS TO REMOVABLE FIXTURES: Generally, a security interest in fixtures that is perfected by a fixture filing has priority over a deed of trust recorded after the fixture filing. See RSMo. &sect;&nbsp;400.9-334. Examples include purchase money security interests perfected by a fixture filing before the goods become fixtures or within 20 days after such time; and readily removable factory or office machines, equipment not primarily used or leased for use in operation of the real property, or replacement of domestic appliances that are consumer goods in which a security interest has been perfected before such goods became fixtures. See id.

PRIORITY AS TO REMOVABLE FIXTURES

Lenders usually require, as applicable, ALTA Form 9 comprehensive, zoning (for commercial property), environmental protection lien, doing business, subdivision, utility access, survey location, variable rate, tax parcel, access and contiguity endorsements and for multi-site transactions, first loss, last dollar and tie in endorsements. In construction loans and other loans involving future advances, a future advances endorsement is available. Construction lenders also require a pending disbursements clause in the policy and a datedown mechanic&rsquo;s lien endorsement prior to each draw. Title insurers generally are willing to insure against filed and unfiled mechanic&rsquo;s liens through the date of the contractor&rsquo;s sworn statement submitted with each draw request.

Missouri

Mortgage Law Summary

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Mortgage Law Summary for Missouri

Missouri

Mortgage Law Summary

Continue reading theMortgage Law Summary for Missouri

Continue reading the
Mortgage Law Summary for Missouri