Yes, surplus funds (also known as excess proceeds or overage) are legit, representing money legally owed to homeowners after a foreclosure or tax sale exceeds the debt.
While the funds are real, the industry is rife with scams, so homeowners should directly contact their county clerk or check state Unclaimed.org to claim funds for free rather than paying high-fee “finders”.
Key Facts About Surplus Funds:
- Definition: Money remaining after a foreclosure auction covers all mortgages, taxes, and liens.
- Legitimacy: These are legally the property of the former homeowner.
- Scam Alert: Third-party “recovery” services often charge excessive, unnecessary fees for a process you can do yourself, sometimes using high-pressure tactics.
- How to Recover: Contact the county clerk where the auction occurred,
- check the county’s online records, or search the state’s unclaimed property division.
- Time Limits: There are limited windows to claim these funds before they are permanently lost or absorbed.
If you receive a letter about surplus funds,
do not sign anything immediately; instead, verify the claim with the county records department.