I bought a house at the last tax sale in August, 2012. Had the title company perform a title search as in Missouri there are stringent notifications to be made to all interested parties, ie those shown on the deed. When I received this information, I found that the first and second lien holders, in this case Mortgage companies, are both out of business and in large legal trouble. They are WMC Mortgage Corp and Beneficial Mortgage Co of Missouri. In this case what occurs? Obviously they were notified by the Courthouse several times prior to the tax sale and did not respond.
Any insight is very much appreciated!
From what I understand, Missouri is a tax lien state with the exception of St. Louis and Kansas city which holds tax deed sale. If the property is located in one of those two areas and you got a tax deed then the mortgages are wiped out because the tax is superior to the mortgages.
If however, the property is not located in those two areas, you have a tax lien certificate. Missouri has a 2 year redemption period which means you have to wait after the redemption period is over before you can foreclose on the property which then wipes out the mortgages. However, the mortgagee has the right to redeem and pay off the tax lien plus interest which could be up to 10% in Missouri.
You need to find out who currently owns the mortgages and also learn more about tax lien investing.
The only other potential problem I can think about is if either one or both of these defunct lenders has filed a bankruptcy in the state of incorporation and your subject property is sitting in another area of the country and no one in your states local, city, county or state government realizes their was a bankruptcy filed across the country which should freeze all property action.
The fact this could be unknown could jeopardize the title as a bankruptcy filing should freeze all state and local actions in any state and could be clawed back by a bankruptcy trustee under federal court order.
Just something to think about, but I think it would not hurt to do some research.