Claim Back What’s Rightfully Yours!

Excess funds are created during a foreclosure or tax sale when a property is sold for more than the total amount owed to satisfy the liens and debts secured by the property. Here's a concise summary of the process and the owner's potential claim:

Creation of Excess Funds:

• When a property is sold at auction, the sale proceeds first go toward paying off any outstanding liens, unpaid mortgages, and associated costs (e.g., legal fees, interest).
• If the sale generates more money than required to settle all debts and expenses, the remaining amount is referred to as "excess funds" or "surplus funds."

Priority of Distribution:

• Excess funds are distributed in the order of lien priority. For example, a primary mortgage is paid before subordinate liens, such as second mortgages or home equity loans.
• After all valid claims are paid, any remaining funds belong to the property owner prior to the sale.

Owner's Claim to Excess Funds:

• If no other liens or unpaid mortgages are due, the former owner may have the right to claim the remaining funds.
• To claim the funds, the owner typically needs to file a formal request with the court or the appropriate agency handling the sale, providing documentation to prove their entitlement.