An expert guide: How to claim surplus funds from a foreclosure
If you have endured a foreclosure, you have enough to worry about. However, many people fail to realize they are often entitled to money from foreclosure. Ultimately, this can be critical to getting off to a fresh start. Still, understanding how to claim surplus foreclosure proceeds is complicated. Fortunately, we're here to help.
Here is everything you need to know about claiming surplus foreclosure funds:
What is a foreclosure claim surplus?
Before understanding how to claim surplus funds, you must understand what a foreclosure surplus is.
When your property is foreclosed and sold for more than you owed on the mortgage, the excess proceeds are surplus funds. Claiming these funds requires determining what kind of foreclosure you experienced.
In non-judicial foreclosures, the lender doesn’t take the borrower to court and appoints a foreclosure trustee to proceed with the process. In judicial foreclosures, the lender does take the borrower to court, and the court appoints the trustee.
Monitor the foreclosure process to determine if the auction yielded surplus funds. To calculate surpluses, subtract the outstanding loan balance from the sales proceeds and add the costs of foreclosing on your property.
Now, let's get into how you can claim surplus foreclosure funds.
How do you claim surplus funds?
After understanding what a claim surplus is, it’s critical to take the proper steps to claim your foreclosure surplus.
Determine the liens
To determine if you should receive surplus funds, consider if anyone else has a claim on your home. Claims are typically documented as a lien by the lienholder in land records, which are accessible at your local county clerk’s office.
Usually, the first recorded lien is the mortgage lender, and the lender gets paid first from the sale after property taxes. However, there may be other claims on your home if you took out a second mortgage or have a credit card judgment lien.
These subordinate liens are called junior liens, and junior liens get paid after the first lienholder gets paid. After all the liens receive payment, you receive excess proceeds.
Check your mail and call
The trustee or court holds surplus funds, which enables you to make a legal claim. Expect a notice of the surplus at your last known address.
If they sold your home in a foreclosure auction and you don’t receive this notice quickly, call the number on past notices. Surplus fund scams are prevalent, so always scrutinize your mail and contact the trustee or officer if something is suspicious.
Act fast to receive the funds
Following the final order of foreclosure, petition the court for your surplus funds ASAP. Complete and file all court-mandated forms with your circuit clerk.
Wait approximately 30 days until they finalize your foreclosure. There is a limited window to recover surplus funds. Prepare necessary documents, like proof of prior ownership. Sometimes, you have to attend a court hearing.
Failure to follow the proper procedure results in surplus funds becoming unclaimed property. After everything, expect an order from the judge granting you the right to the money and take this order to the office holding your surplus.
Contact us now to get started!
If you recently experienced a foreclosure, you may have surplus funds you can claim. However, acting quickly is imperative. Fortunately, at Claim Surplus, we are the premier service that helps clients receive the money they deserve through tailored, communicative solutions. Moreover, we even provide a user-friendly app for streamlined communication. You need competent and experienced services to receive the money you deserve. Luckily, that’s precisely what we provide. Contact us now to get started!
