How can you receive a foreclosure surplus?

When your house is foreclosed, the ensuing situation can seem overwhelming, and it’s easy to lose track of many of the details involved with the process. After all, it feels like you’re losing just about everything, and your primary concern may be just figuring out where you’re going to live and how many of your personal possessions you’ll be able to save. One of those easily-missed details, though, is an important one to keep in mind from the moment the foreclosure process begins: surplus funds.

Foreclosure doesn’t necessarily mean you lose all of the value associated with the home. Many people, in fact, receive thousands of dollars in unclaimed funds once the process is complete. Making sure you receive this money, though, takes planning and a general understanding of the steps you need to take to make sure it can find its way to you.

Claim Surplus is dedicated to making sure as many people as possible receive the money they’re owed after going through this grueling situation. With so much already on your mind, expert help is an important thing to have on your side to avoid losing as much of your money as possible.

In this blog post, we’ll help you start figuring out how to receive the surplus funds you’re entitled to by explaining how foreclosure sales work and what steps to take to receive your foreclosure surplus.

How do foreclosure sales work?

As written in this Nolo article, foreclosures can be judicial or non-judicial. A representative of the court, typically a trustee, will be appointed to conduct the sale. Foreclosure sales usually take the form of an auction, which is conducted either in person or online. The highest bidder at the auction may be a third party or your lender. If it’s your lender, they can get the property through a credit bid. On the other hand, a third party bidder can get the property with the highest bid if they pay with a money order, cashier’s check, or cash.

Getting your foreclosure surplus

Most foreclosed homes today sell for more than the amount the borrower actually owes the foreclosing lender. These funds don’t go to any buyer and are considered excess, or “surplus” funds. The original owner of the home is the one entitled to receive this money. The lender is only entitled to the outstanding balance of the loan plus any costs associated with the sale.

Other factors may decrease the amount you’re entitled to receive even if surplus funds are available after a sale, though. Any entity holding a lien against the home is entitled to a portion of those funds before the borrower is permitted to take from them.

Many people miss out on the funds they’re owed because the trustee or sale officer doesn’t have an up-to-date address to forward a notice about the sale to. While there’s no guarantee you’ll necessarily have surplus funds waiting for you, it’s a good idea to track the sale process and contact the individual conducting the sale once it’s over. You can usually find all of the necessary information for these actions through the foreclosure documents you receive.

Don’t miss out on what you’re owed!

Claim Surplus has covered the process of claiming foreclosure surplus funds before on our blog. In that post, you can read more about the actual process of following up after a sale and receiving the funds you may be owed.

We’re dedicated to helping you through the difficult challenges of a foreclosure with as little loss of your money as possible, and we’re here if you have any questions about our services. Contact us now to find out more about what we can do for you.