Foreclosure surplus recovery are the excess money remaining after a home is sold at auction
for more than the outstanding mortgage debt and costs. Former homeowners and lienholders are entitled to these funds, which are held by the court or trustee. You can recover these funds by filing a claim (often a “Motion for Surplus Funds”) with the court and attending a hearing.
Steps to Recover Surplus Funds:
- Identify Surplus:
- Confirm a surplus exists by checking with the trustee, reviewing court records, or checking the state’s unclaimed property registry.
- File a Claim: File a formal claim or “motion” with the local court or trustee handling the sale.
- Provide Documentation: Submit proof of ownership, such as a deed or title.
- Attend Hearing: Attend the hearing for the judge to approve the disbursement of funds.
Important Considerations:
- Act Quickly: Other creditors might try to claim the funds.
- Lienholder Priority: Subordinate lienholders (e.g., second mortgages, HOA liens) have a right to these funds before you.
- Legal Aid: If the process is complex, you may want to contact a legal aid organization or a local attorney for assistance.
