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Statutory & Equitable Redemption for Deeds of Trust, Foreclosures

Redemption refers to the ability of a mortgagor to stop a foreclosure after a default.

Missouri almost uniformly uses a deed of trust arrangement to handle real estate financing. Under this arrangement, a trustee holds legal title title to the property while equitable title remains with the borrower/mortgagor — i.e., the person(s) generally living on the property. The monetary debt is usually reflected in a simple promissory note, and the debt, in turn, is secured by a deed of trust.

Foreclosure of a deed of trust may occur after default under the deed or promissory note and and acceleration of the entire debt. A mortgagor, in turn, has two statutory redemption rights and a common law right of redemption.  (1) § 443.400, RSMo, allows the property to be redeemed at any time before the foreclosure sale by payment of the entire debt, including costs and attorney fees; and (2) § 443.410, RSMo, which redemption by the mortgagor, or its successors, if (a) notice is given within ten (10) days of the advertised sale, (b) a sufficient bond is approved upon motion to the circuit clerk/court, and the mortgagor (c) pays the debt and all costs within one year.

Missouri courts have further stated that when there are circumstances giving rise to equitable relief, courts may grant relief in proper cases by enforcing the right to redeem independent of the redemption statutes. Accordingly,  old fashioned equitable principles may convince a Judge to grant a redemption. 

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