State Codes and Statutes

State Codes and Statutes

Statutes > Missouri > T26 > C408 > 408_555

Acceleration, repossession and cancellation restricted–requiredprocedures–borrower's right to cure.

408.555. 1. Except as provided in subsection 2 of this section,after a default consisting only of the borrower's failure to make arequired payment, a lender, because of that default, may neither acceleratematurity of the unpaid balance nor take possession of or otherwise enforcea security interest until twenty days after a notice of the borrower'sright to cure is given both to the borrower and to all cosigners on thecredit transaction nor, with respect to an insurance premium loan, givenotice of cancellation until thirteen days after a notice of the borrower'sright to cure is given; notice shall not be given prior to default. Untilexpiration of the minimum applicable period after the notice is given, theborrower or cosigner may cure all defaults consisting of a failure to makethe required payment by tendering the amount of all unpaid sums due at thetime of the tender, without acceleration, plus any unpaid delinquency ordeferral charges. Cure restores the borrower to his rights as though thedefault had not occurred.

2. This section does not prohibit a borrower from voluntarilysurrendering possession of property which is collateral and the lender fromthereafter accelerating maturity of the loan and enforcing the note or loanand his security interest in the property at any time after default. Ifthe lender has not already given the notice described in subsection 2 or 3of section 408.554, he shall upon voluntary surrender of the collateralnotify the borrower either personally or by mail at the borrower's lastknown address that he may owe additional money after the money receivedfrom the sale of the collateral is deducted from the total amount owed.

3. No lender is bound by the provisions of subsection 1 of thissection if default by the same borrower in connection with the same credittransaction with the same lender has occurred twice notwithstanding thecure of such defaults or three times in the case of a second mortgage loanexcept as provided in subsection 4 of this section.

4. Default by a borrower on a second mortgage loan may be cured bytendering the current obligation of the borrower at any time prior to thecompletion of the judicial or extrajudicial proceedings for foreclosureupon such real estate. For the purposes of this section, “currentobligation of the debtor” means the aggregate of all installments scheduledto be due at the time of the tender, late charges otherwise permitted bylaw, and expenses of foreclosures actually incurred by the lender forinitiating a bona fide foreclosure, notwithstanding any contractualprovision for the acceleration of installment payments. A lender may takeno steps to enforce a security interest in real property pursuant to asecond mortgage loan until thirty days after notice of the borrower's rightto cure is given; notice shall not be given prior to default. Curerestores the borrower's rights under the agreement as though the defaulthad not occurred, except that only three defaults are permitted. Thissection shall not affect the debtor's right otherwise to redeem such realproperty under any other provision of law.

(L. 1979 S.B. 305, A.L. 1983 S.B. 70, A.L. 1992 S.B. 705, A.L. 2006 S.B. 892)