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Research Guide to Foreclosure Law in Missouri and Illinois: Overview

Scope and Purpose

There are two types of foreclosure: Judicial foreclosure and nonjudicial foreclosure. In judicial foreclosure, the mortgagee must sue the borrower in court and obtain a judgment before the foreclosed property can be sold a or sheriff's sale.  In states that permit non-judicial foreclosure, the mortgagee does not need to obtain a judgment through the court.  Instead, the deed of trust for the property will usually contain a "power of sale" clause that permits the mortgagee to accelerate the loan and sell the property at a public auction in the event that the debtor defaults.  This means the foreclosure process can theoretically take as little as a couple months.  While lenders may like that the process is cheaper and faster, there is almost judicial oversight to protect unsophisticated homeowners.  Missouri has both judicial and non-judicial foreclosure, with the vast majority of foreclosures taking place without involving the courts.  Illinois, on the otherhad, only has judicial foreclosure.

This guide provides an overview of resources related to foreclosure law in Missouri and Illinois.  The resources provided in this guide include statutes, secondary sources, and internet resources on the topic of challenging foreclosure.  Although the sources included in the guide may be helpful in understanding foreclosure generally, this guide is primarily intended for those representing borrowers in defending against foreclosure actions. It is intended to assist attorneys with little or no familiarity with this subject matter in understanding the foreclosure process and possible avenues for defending clients against foreclosure actions.

The Mortgage Crisis in a Nutshell

Although foreclosure rates in most states have reached their peak, there continues to be fallout from the subprime mortgage crisis.  Much of the resulting litigation deals with securitization of mortgage loans and the creation and use of the Mortgage Electronic Registration System (MERS).  MERS is a private company created by a group of banks, lenders, and servicers to track the recording of mortgage interests without filing mortgage interests in office of each county recorder of deeds.  Member institutions within MERS can buy and sell mortgages with MERS tracking ownership. The transfers involve less paperwork and looser restrictions. Often times, many mortgages are bundled together and bought or sold.  As a result, it is difficult for foreclosing lenders to prove ownership of the mortgage.

Student Guide Author

This guide was originally created by Sarah Ayres in support of Professor Diamond's Advanced Legal Research class for Fall 2012. The contents of this guide should not be taken as legal advice or as the work product of MU Law librarians.

Stop Foreclosure

Photo by Michael Fleshman, http://www.flickr.com/people/60513726@N03.

Research Strategy

Research on foreclosure topics is state specific.  The best place to start research is in a state-specific practice guide, usually published by the state bar association.  For simple explanations and applications of the foreclosure statutes, these sources are usually on point and will direct the researcher directly to the necessary statutes.  In addition, they generally include citations to recent and relevant cases on the subject.

The next step is to look at case law.  Much of foreclosure law will be factually based and will turn on the contents of the deed of trust.  Familiarity with the specifics of the deed agreement and note, as well as an accounting of the debtor's account, are critical.  This may involve searching property records or compiling a history of the debtor's account.

The last step is to check that all cases relied upon are current.