Frequently Asked Questions about Surplus Funds or Excess Proceeds
What is surplus?
If the purchase price at the foreclosure sale exceeds the borrower’s loan balance, this extra amount is called “excess proceeds” or “surplus funds.”
How do I claim the Surplus Funds?
The procedures for distributing and claiming surplus funds after a foreclosure sale differ from state to state. And claiming surplus funds is sometimes a complicated process that can be confusing for homeowners, especially after the stress of going through a foreclosure.
Talk to a Lawyer or Foreclosure Consultant if you need help getting the excess money after a foreclosure. Foreclosure experts often handle surplus funds claims, ensuring that foreclosed homeowners recover the money they’re entitled to after a foreclosure.
What happens if I don’t claim my funds?
Usually, unclaimed surplus funds go to the state’s unclaimed property division. (also known as Escheatment)
What is Escheatment?
Escheatment refers to the right of a government to take ownership of estate assets or unclaimed property.
Why am I entitled to Surplus Funds money?
After the third party trustee foreclosure sale, there was a balance that exceeded the loan amount you owe to the lender. These excess funds are payable to you since the lender is only interested in the amount owed to them.
What If I am the son or daughter and my parents didn’t leave a Will/Trust?
Birth Certificate and Death Certificate will suffice.
Who else gets paid before I can access surplus funds?
Generally, if any junior liens were on the home, like a second mortgage or HELOC, or a creditor that recorded a judgment lien against the property, those parties get the first crack at the surplus funds. Then, any excess proceeds left over after paying off these liens belong to the former homeowner.
I'm divorced, does my ex-wife/husband have to consent?
If he or she is on the property title, then we would need both parties to consent.
How do I get more time on the property?
We can assist in contacting the new homeowners to negotiate more time in your property as well as “cash for keys.”
How much time do I have to claim surplus funds?
Trustees have 30 days from the auction to notify all interested parties (such as second mortgage holders, tax lien holders, or credit card lien holders) of the possible surplus funds via mail.
Interested parties (including you) have 30 days from the notification to assert their claim. Failure to respond within the 30-day deadline can result in losing rights to funds.
