Understanding Your Rights
Also known as "excess proceeds," surplus funds represent money that legally belongs to you — but most people don't even know they exist.
When a property goes through foreclosure, it's sold at a public auction. If the auction sale price is higher than the total debt owed (including the mortgage balance, fees, taxes, and other liens), the difference is called surplus funds or excess proceeds.
This $70,000 legally belongs to the former homeowner.
Several factors contribute to the lack of awareness about surplus funds:
Courts and trustees rarely notify former homeowners that surplus funds exist or are available for claim.
After losing a home, people often move and don't receive any communications about excess proceeds.
Even when people know funds exist, the legal claim process is complicated and intimidating to navigate alone.
Many assume they have no rights to anything after foreclosure — which simply isn't true.
The right to claim surplus funds follows a specific order of priority established by law:
The person who owned the property at the time of foreclosure has first priority to claim surplus funds.
If the former owner has passed away or cannot be located, their heirs or estate may be entitled to the funds.
Second mortgage holders, HOAs, or other junior lienholders may have a claim to surplus funds after the primary owner.
Claims must be filed within a specific timeframe — typically within months to a few years depending on your state. Miss the deadline and you lose your right to these funds.
If surplus funds remain unclaimed, they eventually become property of the state (escheated). Recovery becomes much more difficult after this happens.
You'll need to prove your ownership and identity with proper documentation. Missing or incorrect paperwork can delay or jeopardize your claim.
Surplus funds belong to you — not the state. Let us help you determine if you're owed money and guide you through the recovery process.
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