Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Missouri, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to the borrower's failure to make mortgage payments as agreed upon in the loan contract. Missouri permits both judicial and non-judicial foreclosures. In a judicial foreclosure, the lender must file a lawsuit and obtain a court order to foreclose on the property. This process involves the court system and can take a significant amount of time. Non-judicial foreclosure, on the other hand, does not require court intervention if the mortgage agreement includes a power of sale clause. This clause allows the lender to sell the property without court oversight after providing the borrower with the required notice. The borrower is typically given a chance to stop the foreclosure by paying the overdue amounts, plus fees and costs, before the sale of the property. If the foreclosure proceeds, the property is sold, often at a public auction, and the proceeds go towards paying off the mortgage debt. If the sale does not cover the full amount owed, the lender may be able to pursue a deficiency judgment against the borrower for the remaining balance, depending on the terms of the mortgage contract and state laws.