Thomas defaults on his Missouri deed of trust loan. The trustee completes a non-judicial trustee's sale. After the sale, the sale proceeds are insufficient to cover the full outstanding loan balance. Under Missouri law, which of the following best describes the lender's options?
Correct Answer
A) The lender may pursue a deficiency judgment against Thomas by filing a separate court action within the applicable limitations period
Missouri does not have a broad anti-deficiency statute that bars deficiency judgments after a non-judicial trustee's sale. Under Missouri law, after a trustee's sale, if the sale proceeds do not satisfy the full debt, the lender (beneficiary) retains the right to pursue a deficiency judgment against the borrower (trustor) by filing a separate court action. The promissory note, which evidences the personal obligation, remains enforceable for the deficiency amount. This is a critical distinction from states with anti-deficiency protections.
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