Blog

What Happens if There is a Surplus of Proceeds from a Foreclosure Sale?

It’s certainly unusual, but every now and then a property will get more money at a foreclosure sale than is owed on the outstanding mortgage. When this happens, the former owner of the property might be entitled to some or all of that money, depending on the terms of the foreclosure. When the owner of the home signs away the rights to any proceeds, none may be collected. When you receive notice of the lawsuit or the foreclosure, you may be required to forfeit any funds from the sale that you think you are entitled to.

There might be additional liens against the property as well. In those cases, the surplus from the foreclosure sale will go to satisfy those debts. This might be an outstanding tax bill or some other lien that was placed against the property because the owner had defaulted on a debt that was owed.

If there are no liens against the house and you did not sign away your rights to the foreclosure proceeds, you are entitled to file a claim for that money. You’ll need to do this within 60 days of the sale. If you’re found to be legally entitled to this money, you can expect payment, minus the court costs that are associated.

The filing of such a claim can be complicated, and the courts require perfection, so consider talking to an experienced attorney before you file any paperwork. You don’t want to leave any money on the table, so if you think the sale of your foreclosure exceeded what you owe your lender; it’s worth your time to call a lawyer.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.