FORECLOSURE
Disclaimer
This site provides information about foreclosure laws. But legal information is not the same as legal advice. The application of law varies on a case by case basis. We strongly advise you to speak with a lawyer if you want professional assurance that this information, and your interpretation of it, applies to any particular circumstance. We do not guarantee the accuracy of any information provided and disclaim all liability for any claims or damages which may result from errors or omissions.
Approximately 2%
Approximately 2% of our loans end in foreclosure. How do we keep it so low? As a borrower, it's painful to be foreclosed on. Not only do borrowers lose months of wasted time and thousands of dollars, but they end up with a foreclosure on their record and all of the stress and hassle that creates.
​
Additionally, we do everything in our power to avoid foreclosures. Our first line of defense is common-sense underwriting followed with frequent property inspections. Our short, 6-month loan terms also serve as a means to keep projects on schedule and motivate borrowers.
​
Our first response to a non-performing borrower is to attempt to help them work through whatever problem they're facing. We've found that sticking to a non-aggressive people-focussed approach often does wonders for helping to get loans back on track. Foreclosure is not an anyone's best interest, and we do everything we can to avoid it.
​
Sometimes it becomes unavoidable.
​
Below is a summary of the foreclosure process in Missouri and Kansas. The summaries are for convenience only and are not to be used to interpret or define the terms of foreclosure in either state. Click on any segment of the summary to view the corresponding text as written on the deed of trust or mortgage. You may also click the below link to access more information in reference to foreclosure laws.
How we avoid it
If we can't avoid it
Missouri
Security Instrument
-
Borrower defaults
-
Lender demands payment
-
Trustee notifies borrower of demand
-
Trustee publishes sale date of property
-
Lender sets starting bid*
-
Trustee holds public sale
-
Lender is paid
-
If a third party bought, lender receives funds
-
If no one else bid, lender buys from himself
-
-
Trustee conveys title with special warranty deed
​
To view Missouri's foreclosure law, please Click Here.
In some cases, the lender may be allowed to bid less than he is owed. The amount owed includes principal, interest, attorneys' fees, court costs, and other charges. (Fully described in the deed of trust).
​
When applicable, the lender typically chooses to bid less than he is owed in order to leave a deficiency on his books so as to be able to sue the borrower for the deficiency, while still being able to attempt to recover the full amount owed by means of selling the property. State laws change continuously, you should consult with an attorney to advise you of the current foreclosure law in each state.
The Cost of Foreclosure
-
Payment to Trustee and Court Costs
​
-
Coordination and communication with the Trustee
Approximately $2,000
(paid by you upfront)​
(added to what is owed)
FREE
(provided by North Oak Investment)​
​
Kansas
Security Instrument
-
Borrower defaults
-
Lender demands payment
-
Lender hires attorney to file foreclosure suit
-
Attorney publishes foreclosure sale
-
Lender sets starting bid*
-
Attorney holds public sale
-
Lender is paid
-
If a third party bought, lender receives funds
-
If no one else bid, lender buys from himself
-
-
Lender is conveyed title with a sheriff's deed
​
To view Kansas' foreclosure law, please Click Here.
In some cases, the lender may be allowed to bid less than he is owed. The amount owed includes principal, interest, attorneys' fees, court costs, and other charges. (Fully described in the mortgage).
​
When applicable, the lender typically chooses to bid less than he is owed in order to leave a deficiency on his books so as to be able to sue the borrower for the deficiency, while still being able to attempt to recover the full amount owed by means of selling the property. State laws change continuously, you should consult with an attorney to advise you of the current foreclosure law in each state.
The Cost of Foreclosure
Approximately $2,000
(paid by you upfront)​
(added to what is owed)
FREE
(provided by North Oak Investment)​
​
-
Payment to Attorney and Court Costs
​
-
Coordination and communication with the Attorney
What if the housing market drops?
Stock Market Drops
A
B
Panic, sell at a loss, lose money
Wait for the market to recover, then sell
Housing Market Drops
A
B
Panic, sell at a loss, lose money
Wait for the market to recover, then sell
Collect rent while you wait
When and if the time comes for us to foreclose on one of your loans, we'll handle all of the back and forth with the attorney/trustee at no cost to you. Additionally, if you decide to sell the property, we'll coordinate with a realtor and manage the property until the time it is sold, at no cost to you.
​
If for any reason, you decide not to sell the property immediately but would rather collect rent for any length of time, we will become your property manager at a flat rate of 9% gross rental income.
​
If you decide to rent the property but would rather find another property management company or do it yourself, we will help you locate vendors and help coordinate the process.
​
​
If you decide to use us as a property manager, this is how it will work.
What you pay us
Other costs you pay
What you receive
What we will do
-
9% Gross Rental Income
-
Paid Monthly​
-
-
50% First Month's Rent
-
Hazard Insurance
-
Property Tax
-
HOA Fees (if applicable)
-
Maintenance Costs
-
Market Value Rent
-
Paid Monthly​
-
-
Deposit
-
1 Month's Rent​
-
-
Pet Deposit (if applicable)
-
$300​
-
-
1-2 Year Lease Agreement
-
Advertise and Lease
-
Qualify Tenants
-
Write the Lease
-
Collect Deposits & Rents
-
Contract Maintenance
-
Pay All Bills
-
Send Net-Income To You
-
Monthly​
-
Plan B Calculator
An example of what the numbers might look like.
Property owners shoot for 1% of value per month, our maximum LTV is 80%, so we split the difference and plan to get 1% of 9/10ths of the market value per month.
Our average loan ($133,000) + Accrued Interest + Foreclosure Costs + 50% 1st Month's Rent.
We charge 9% of the gross monthly income. Average rates are between 8% and 12%.
Calculated at 1.2% of the property value per year.
Calculated at 1.11% of the property value per year.
Calculated at .48% of the property value per year.
Calculated at 1% of the property value per year.
Actual income and expenses will vary.