What Are Surplus Funds?

Surplus funds are the remaining proceeds from the sale of a property at a sheriff’s sale or foreclosure auction. If the sale price exceeds the amount owed on your mortgage, property taxes, and other secured debts, you may be entitled to claim the surplus. In many cases, this amount can total thousands of dollars. However, additional obligations such as liens, legal fees, or other encumbrances may also need to be satisfied.

What Are Surplus Recovery Agents?

Surplus recovery agents—also known as surplus recovery specialists—work in collaboration with foreclosure attorneys to assist individuals navigating the foreclosure process. When you engage our team, our primary goal is to help you identify, claim, and recover any surplus funds or excess equity to which you may be legally entitled.

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How Foreclosure Sales Work?

Around 120 days after you stop making your mortgage payments, the lender will likely begin a foreclosure. The process will be either judicial (through the state courts) or nonjudicial (where the lender must complete a series of out-of-court steps, like mailing a notice of foreclosure and publishing it). After the lender completes all necessary foreclosure procedures, the home is sold to a new owner at a foreclosure sale.

 

What Happens to Surplus Funds If You Have a Second Mortgage or Other Liens on Your Home?

 

Generally, if any junior liens were on the home, like a second mortgage, HELOC, or a creditor recorded a judgment lien against the property, those parties get the first crack at the surplus funds before the homeowner can get them. Any excess proceeds left over after paying off these liens belong to the former homeowner.

For example, Jack and Georgia go through a foreclosure. At the foreclosure sale, their home sells for $550,000. The loan balance they owed the foreclosing lender at that time was $525,000. So, the sale resulted in surplus funds of $25,000. The property was also subject to a second mortgage of $15,000. In addition, a credit card company got a $5,000 judgment lien on their home after it filed a lawsuit against Jack and Georgia for a money judgment and won. In this situation, $525,000 goes to the foreclosing lender, $15,000 goes to the second mortgage holder, and $5,000 to the judgment creditor. Jack and Georgia can claim the $5,000 overage that remains.

However, depending on the situation, a junior lienholder or foreclosed homeowner could lose their rights to the excess proceeds if they don't respond to judicial foreclosure proceedings or follow the correct procedures for claiming the surplus.

 

How Much Time Do I Get to Claim Surplus Funds?

 

You (the foreclosed homeowner) must make a claim to get your share of surplus funds from a foreclosure. You'll need to act quickly to claim surplus funds after the foreclosure sale. A limited amount of time will be available for you to get the funds. The exact amount of time you'll have depends on state procedures.

 

What Happens If I Don't Claim Foreclosure Surplus Funds?

 

It's your responsibility to claim surplus funds after a foreclosure; the court or foreclosure trustee won't come looking for you to give you the excess money.

 

What happens to unclaimed surplus funds from a foreclosure sale depends on the specific laws and regulations in the jurisdiction where the sale happened. Usually, unclaimed surplus funds go to the state's unclaimed property division. You might still be able to access the funds if you find yourself in this situation.

 

Getting Surplus Funds After Losing Your Home to a Property Tax Sale or Tax Foreclosure

In 2023, a unanimous U.S. Supreme Court said in the case of Tyler v. Hennepin County, 598 U.S. 631 (2023), that it's unconstitutional for the state or local government to take your home to cover your property tax bill and then keep the profits. So, if you lose your home to a property tax sale or property tax foreclosure, you have the right to make a claim for any excess proceeds.

 

FAQ's:

Q: Why do I need to work with a recovery agency?

A: Working with surplus recovery experts will help you understand your rights and the amount you’re entitled to. Our specialists can also provide thorough legal assistance and guide you through the foreclosure process step by step.

 

Q: Who does your agency serve?

A: Max Tax Refund + proudly offers complete foreclosure assistance for all clients in the United States.

 

Q: Why should I work with your agency?

A: We only employ highly trained and qualified surplus recovery specialists who are familiar with foreclosure law. Because foreclosure law is complicated, it’s important to work with experienced professionals. We can help you avoid costly mistakes and speed up the foreclosure process by providing foreclosure auditing services, professional legal assistance, and claims assistance.

 

Q: How much money can I get?

A: The foreclosure process is different for every individual. When you consult with us, our surplus recovery specialists will always be straightforward and honest about what to expect at every stage of the process.

 

Q: Why do I need auditing services?

A: Auditing is crucial in determining the amount of money owed to you. Our surplus recovery specialists perform in-depth research to find unclaimed funds held by trustees or government agencies.

 

Q: What types of unclaimed funds are there?

A: Unclaimed funds, also known as unclaimed property, may include:

• Tax Refunds
• Escrow
• FHA Mortgage Insurance
• Over-payments
• Certificates of Deposit
• Heir Estates
• Deed & Tax Sales
• Bankruptcy
• Claims Court Judgements