A Missouri real estate broker, Linda, has a client who is purchasing a commercial property in St. Louis using seller financing. The seller wants to use a traditional mortgage rather than a deed of trust as the security instrument. Which of the following statements most accurately describes this situation under Missouri law?
Correct Answer
B) A mortgage is permissible in Missouri, but foreclosure would require judicial proceedings rather than the non-judicial trustee's sale process
While Missouri primarily uses deeds of trust as security instruments, mortgages are not prohibited under Missouri law. A traditional two-party mortgage may be used in Missouri real estate transactions, including seller-financed deals. However, the critical distinction is that the non-judicial trustee's sale foreclosure process under RSMo §§ 443.290–443.430 is only available for deeds of trust—not for mortgages. If the seller uses a mortgage instead of a deed of trust, foreclosure upon default would require judicial proceedings (a court lawsuit), which is a slower and more expensive process. This is a key reason why deeds of trust are strongly preferred in Missouri.
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