St. Louis Tax Sales Make Money

St. Louis Tax Sales make money.  St. Louis Tax Sales happen because of non payment of Real Estate Taxes.  St. Louis County holds its largest sale every August and St. Louis City holds sales four times a year as the properties are sold in geographical regions.  The procedure to purchase property differs greatly between the County and the City.  The City goes through a judicial process, and the County does not.  The County is part investment for First and Second Sales, the purchaser, for his or her money, receives a Certificate. All is not lost for the homeowner.  The homeowner has one year to to pay the back taxes.  The purchaser will in return receive his or her money back plus 9% interest. St. Louis Tax Sales in the County are coming up and you need to be prepared. A smart investor is an informed investor. Do your homework for each property you want to bid on. Go to Google Maps or drive by the property.  Remember, you can not go inside.  You should be careful not to walk on the property as you may get shot.  Look at values of comparable houses in the area.  This can be done on or viewing the St. Louis County Collector of Revenue website.  Determine how much you can spend and presume the worst about the interior condition.

Now that you own the Certificate, you job, or that of your attorney, is just starting.  NOTICE must be given to all interested parties at least 90 days before the expiration of the one year right of redemption.  Obtain a title report so you know who and where to send the notice.  Send the notice by regular first class mail and certified mail.  Failure to give proper notice will cause you to loose the property. Once this is done and the one year has expired, you can complete an affidavit and obtain a Collector’s Deed.  You now own the property but still you do not have clear title.  It is recommended that you file a lawsuit to “Quiet Title” the property.  A judgment on quiet title will allow you to obtain title insurance which will increase your ability to sell the property.

St. Louis Tax Sales Make Money.  Now, go find your diamond in the rough.


New Mortgage Servicing Rules are in effect which will be slowing down foreclosures.  This may be old news to some but when talking about having to follow rules, news moves slowly.  Two new changes in Regulation X took effect in January.  (Section 1024.38) sets out general servicing policies and procedures for mortgage servicers (most people just say “my mortgage co”).  Reg. X requires servicers of loans to have policies and procedures in place to provide accurate and timely information to borrowers, properly evaluating loss mitigation applications.  (Section 1024.41) sets out loss mitigation procedures.

The CFPB (Consumer Financial Protection Bureau) rules protect consumers from risky mortgage servicing business practices.  These rules modify Regulation Z of the Truth in Lending Act (TILA) and Regulation X of the Real Estate Settlement Procedures Act (RESPA) dealing with the procedures for various servicing of loans.

Servicers are required to acknowledge the receipt of a loss mitigation application within 5 business days if received 45 days or more before foreclosure.  If a complete application is received more than 37 days before a scheduled foreclosure sale, the servicer is required to evaluate the borrower within 30 days for all loss mitigation options and notify the borrower of any loss mitigation offers.  All of this will be slowing down foreclosures.

Of significance is the rule’s prohibition of making the “first notice or filing” required by law for any foreclosure process until the loan is more than 120 days delinquent.  If the borrower submits a complete loss mitigation application during that time, the servicer cannot initiate foreclosure until the loss mitigation process is exhausted.  If foreclosure has started and the application is received, the servicer cannot move for judgment or conduct a foreclosure sale until the loss mitigation process is exhausted.

Short sales of Property on the Rise

Are short sales of property on the rise?  Yest, according to RealtyTrac, short sales of property are on the rise and accounted for 22% of all residential sales in 2012.  (2013 data was not available).  Recent changes on the rules regarding short sales by Fannie Mae and Freddie Mac resulted in many more short sales being approved prior to foreclosure.  The rules require less documentation from the consumer.

There are many driving forces.  For consumers and lenders this is a less traumatic and more controlled event.  Lenders now realize they will sustain smaller losses if they approve a short sale rather than approve a foreclosure. Buyers prefer to purchase from an owner, who can give disclosures and information about the property rather than buy from an anonymous bank who has no information about the property. Another driving force is that the foreclosure process continues to take more and more time due to increase litigation, regulations and delay tactics by consumers.

Is this a positive sign or a sign of more trouble ahead for the housing market?  The answer appears to be Yes and No.   On the positive side, a short sale helps preserve communities.  Besides having a higher price point, it is less disruptive to neighborhoods as the property typically will not be vacant or vandalized.    Short sales create the benefit of having property occupied with a family that is able to buy services, keep up the property and pay real estate taxes.  

On the negative side, large number of short sales also opens the potential for fraud.  Some argue that short sales are actually part of the housing market’s problem as it reflects the negative sentiment about the housing market.  It says that lenders and investors only approve short sales because they do not see a real recovery.   It could mean that properties are still underwater and that recovery is only an investor/cash recovery.   The people who are buying are typically not first time homeowners but investors who are purchasing real estate at discounted prices to use as rental properties.   When the supply gets too tight and the prices rise, the investor will back out of the short sale market and there will be another drop in sales.


How to value a home after foreclosure can be difficult.  Homeowners and realtors say these homes are not part of the market and appraisers are say the opposite as every property sold is in the market. It is generally accepted that a foreclosed house is used as a comparable in deciding the fair market value.  Is it fair?  No, as foreclosures have a stigma in the marketplace, as they are atypical.   Also, most foreclosed homes are sold “as is” (no warranties).   You have no idea how the former owner cared for the house.  There could be concrete poured down the drains, destroyed electrical and HVAC systems.  Say, “Sorry” to the new homeowner.   This “unknown” adds to the negative price attached to a foreclosure.  The condition of property also adds to the low value.  These properties are not maintained and can sit vacant for months or years.    The market area surrounding the foreclosed home is affected.  Foreclosures lead to abandoned homes.  Abandoned homes lead to vandalism. Vandalism leads to boarded up homes which leads to a market area where no one wants to live.

So, how to value a home after foreclosure got even harder.  As more foreclosures occur in an area, the value of other homes is reduced.  An appraiser is going to look at REO (bank property) first as all buyers typically look to the clearance section first.  It is realty that appraisers will use these foreclosed properties with reduced values to appraise surrounding property resulting in lower appraised values of all neighboring property.

Is there a new defense against Missouri Foreclosures?

Is Dodd-Frank Act the new weapon against Missouri foreclosures?   The section being used is where “no residential mortgage loan… may include terms which require arbitration or any other nonjudicial procedure as the method of resolving any controversy or settling any claims arising out of the transaction”.  The argument is that the Dodd-Frank Act outlaws Missouri foreclosures and preempts the state law that allows such foreclosures.  It is a stretch to think the Act applies to non judicial Missouri foreclosures.  This section in the Act applies to other types of consumer-related disputes between borrowers and lenders such as TILA claims or escrow disputes.  Congress did not intend to dismantle the Missouri non judicial foreclosure process which would wreak chaos as 99% of Missouri foreclosures are processed in this manner. Yet, attorneys across the country are ignoring the intent of Congress and attempting to slow the process down by forcing a judicial foreclosure process on non judicial states such as Missouri.


Should Missouri foreclosure law change so the sale price is based on the fair market value?  Missouri foreclosure law states that the sale price is based on the amount bid at the foreclosure sale. This may cause the sale price to be far below the fair market value.

Missouri Supreme Court in 2012 addressed a deficiency calculation after a foreclosure in First Bank v. Fischer & Frichtel, Inc.   A balance due or deficiency was determined by the sale price minus the debt balance.  This format has been in place for over 100 years in Missouri.  The court stated that the century old practice “of using the foreclosure sale price have no application to a sophisticated debtor such as Fischer & Frichtel”.

Should the rule be different for an unsophisticated homeowner by allowing the homeowner to pay the difference between the debt and the fair market value of the property at the time of the foreclosure?

These days the lender is often the sole bidder who buys the foreclosed property for far less than market value and then sells the property at a profit.   The lender then collects a deficiency from the homeowner based on the below-market value it paid for the property. Windfall!

Missouri’s foreclosure law rule for calculating damages in a deficiency proceeding is inconsistent with the underlying purpose of awarding damages. The purpose of a damage award is to make the injured party whole without creating a windfall. In nearly every context dealing with damage to or the loss of a property or business interest, Missouri law measures damages by reference to fair market value. Yet Missouri foreclosure law ignores the fair market value of the foreclosed property and, instead, measures the lender’s damages with reference to the foreclosure sale price.

Missouri foreclosure law has recognized that a foreclosure sale is not conducive to achieving a price that reflects the fair market value of property.  A foreclosure sale contains conditions for purchase that are subject to time and financing constraints not present in a sale on the open market.   For these reasons, property sold at a forced sale does not bring its full value.

Keeping a 100 year old Missouri foreclosure rule is inconsistent with the goal of fully compensating the injured party and avoiding a windfall for the injured party.






Crack houses, run down houses, vacant houses, all are problems.  The City of St. Louis wants to arm neighborhoods, homeowners, and their associations, to protect houses, by providing for money damages if a nuisance exists that affects the property values of a neighborhood because a property owner allowed his property to be in a deteriorated condition due to neglect or failure to maintain.   We all know of a resident who allows clutter on the property such as abandoned cars and appliances.

The City of St. Louis wants to allow a neighborhood association to seek injunctive relief in court if a house with local code violations does not get fixed.  To get results you will first need to give 60 days’ notice to the tenant or property owner of the problem and allow for the nuisance to be corrected.  If not, then the association can ask the court to step in.

Reach out to your congressman and tell your senator or House member that you support an amendment to Section 82.1025 and Section 82.1029.


Missouri Real Estate Tax Foreclosure Sale purchases are profitable.  The key is to know where to purchase and the laws for your area.  There are three (3) sets of Missouri statutes used for the sale of real estate for non-payment of real estate taxes: (1) laws that apply to the City of St. Louis, Missouri,  (2) laws that  apply to Jackson County and which may apply to some parts of Kansas City, Missouri, lying outside Jackson County, Missouri , and (3) laws that apply to all other counties like St. Louis County.

Delinquent Real Estate Tax Sale procedures currently used in the City of St. Louis and JacksonCounty are based upon judicial foreclosure of tax liens through land tax suits and provide judicial confirmation of the delinquent tax sale as one of the procedures followed in land tax suits.

Delinquent Real Estate Tax Sale procedures currently used in the County of St. Louis is based upon an administrative action (no judicial foreclosure) by the County Collector of Revenue. You will need a finish up the process with a lawsuit.

Tax Sales are held on different dates and times based on the County.  

St. Charles County– Sales are held once a year in August.

St. Louis City-Real Estate Tax Foreclosure sales are held 5 times a year (MayJuneJulyAugust and October) Sales are held at 9:00 am in the lobby of the Civil Courts Building (10 N Tucker Blvd).

Jefferson County   Real Estate Tax Foreclosure sales are held once each year at 10:00 a.m. on the fourth Monday in August. 

Franklin County- Real Estate Tax Foreclosure sale are held once per year.  The next sale is tentatively scheduled for December 13, 2013 at 10:00am in the Franklin County Commissioner’s Meeting Room.

St. Louis County- The Saint Louis County Collector of Revenue’s office conducts its annual real property tax sale on the fourth Monday in August.




Does a letter of indemnity actually resolve a title defect?  Lenders who have refused indemnity letters for title defects include FNMA, GNMA, and HUD.

It is the current mortgagee’s title insurer that is required to obtain the release from the prior lender.  If they cannot, then they issue an indemnity.  The acceptance of an indemnity letter is only between title insurance underwriters and between FNMA, GNMA or HUD.   So, what these lenders are rejecting is a clear title insurance policy, which in effect means they are rejecting title insurance as a financial product that facilitates mortgage lending.

For decades issuing an indemnity to clear up an unreleased mortgage was standard.  But the old ways no longer apply to unreleased prior mortgages.  Presumably the title agent paid the prior lien off but did not get a release and/or did not record it.  Without proof of payment in full on the loan, no one can assert the loan was paid.

Where a letter of indemnity is deemed unacceptable to fix a title defect, a Quiet Title Action would need to be pursued.  The title company under the policy could file a lawsuit to “quiet the title” on behalf of the homeowner; however, this will not happen because the title company must pay the costs.  Title companies are in the business of taking your money not spending it. Marketable title is what the title policy guarantees.   What is being requested by the Lenders – clear title – is a virtual impossibility. HUD and the other lenders are failing to see the difference between clear title and marketable title.   By issuing the indemnity letter the title company is complying with the terms of the policy; thus, the title company will take no further steps to resolve the issue.

The costs then fall on the lender if they want clear a title defect and not just marketable title.