Mortgage Surplus Funds in California
Many people believe that foreclosure is the conclusion of the process, and they have no idea what occurs next. If you were evicted from your house due to foreclosure, you may be entitled to Mortgage Surplus Funds
You are entitled to a check for any money left over from the sale of your home if it was sold at a foreclosure auction with equity remaining. It is referred to as Mortgage Surplus Funds. After the house is sold at an auction the former homeowners can claim the surplus funds.
Read on to learn more about Mortgage Surplus Funds.
What Are Mortgage Surplus Funds?
Mortgage surplus funds, also known as surplus funds, overage, or excess money, are the funds left over after a mortgage is paid off through a foreclosure auction’s final verdict.
The amount you can collect from mortgage surplus money is determined by the amount owed to the lender and the house’s selling price. Mortgage surplus funds are calculated by deducting outstanding mortgage balances from the bidder’s purchase price, which includes any and all fees and penalties incurred by the property. To put it another way, surplus funds are the difference between the selling price and the balance due.
Who Can Get Surplus Funds After Foreclosure?
Any other creditors with liens or judgments may petition for surplus funds if the residence is sold at auction with a surplus. The funds can be claimed by the homeowner if the other lien or judgment holders do not apply. The funds should go to the homeowner if there are no other creditors with liens or judgments. Or the liens and judgments have been satisfied.
Any extra funds in California must go to the most recent owner of the repossessed property, according to the law, if there are no other entitled parties. If another party has a claim to the property, such as a second mortgage, the surplus funds will be utilized to pay down the debt, and the remaining funds can be claimed by the previous owner once secured liens have been paid off.
If the person dies and you are their heir, you can also collect a surplus for them. This can be accomplished by establishing a probate estate. Because this is a more complicated legal process, you will almost certainly require the assistance of a lawyer.
If there are multiple heirs, each must agree to divide the surplus, complete the paperwork, and appear in court. You will need to contact a lawyer if there is no agreement to divide the surplus.
A renter living in a foreclosed property is not entitled to a surplus.
How To Recover Surplus Funds?
The foreclosing attorney or officer will send you a Notice of Surplus if there is a surplus after your property is sold. Unless you have informed the court of a new address, this notice is normally sent to the foreclosed property address.
You can still find out if there was a surplus in your case if you didn’t receive a notice, or if you did but can’t find it now. Go to the circuit clerk’s office in your county to see whether there is a surplus.
To view the file, you must bring identification and complete a form. Your case number will be required (it appears in the top right corner of all your court papers).
Look for the Report of Sale in the court file. The amount of your surplus should be indicated on the Report of Sale. The amount of the surplus, if any, is occasionally mentioned in the Order Approving Sale if the Report of Sale is not in the file.
If you are unable to locate the documents you require, contact a supervisor in the circuit clerk’s office. The supervisor may be able to assist you in locating a microfilm copy.
You are unable to remove or add papers to your file. You may, however, make copies. It’s important to remember to bring a form of payment. A certified copy is not required. All you’ll need is a photocopy.
If you owned the house before the foreclosure and believe you are entitled to surplus funds, you should contact the trustee as soon as possible following the auction.
On the Notice of Trustee Sale, you’ll see the trustee’s contact information. If necessary, a copy of this notice can be obtained from the local recorder’s office.
How To File A Claim For Surplus Funds?
You can petition the court for the surplus funds once the final foreclosure judgment has been issued.
After you’ve completed the papers, you’ll have to wait 30 days for the foreclosure on your home to be completed. You can send in your forms for any surplus once your foreclosure case has reached a final verdict.
Following the filing of the surplus documents. The judge will issue an order granting you the right to money based on the surplus from your foreclosure. Take this order to the office where your surplus is kept. The order will then be processed by this office, which will take about 10 business days. The surplus monies will be released after that.
How Long Does It Take To Get Surplus Funds?
Each case is unique. The surplus money will be placed with the clerk of the superior court in the county where the auction took place or has already been deposited. To get the cash released, you must file a motion with the court.
Trustees have 30 days following the auction to mail notices to any interested parties (such as second mortgage holders, tax lien holders, or credit card lien holders) about any potential excess funds.
Interested parties (including you) have 30 days to lodge their claim after receiving notification. If you do not answer within 30 days, you may lose your access to funds.
Do I Need An Attorney?
Here are some of the benefits of hiring an attorney:
- They’ll assist you in filling out and filing the necessary documents.
- They’ll make certain you act before your claim expires.
- They’ll assist you in keeping track of your home’s auction.
It is not necessary to hire a lawyer for this procedure in many states. You can do your own research about how to claim your foreclosure overages. However, having an attorney on your side is a significant plus.
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