What Are Surplus Funds?

Surplus fund recovery refers to the process by which former homeowners or lienholders claim excess money leftover from a foreclosure or tax sale after all debts and associated costs have been paid. This remaining balance, known as "surplus funds," legally belongs to the property's former owner in most cases, but often goes unclaimed due to lack of awareness or the complexity of the recovery process. 

How to recover surplus funds?

The process for recovering funds varies by state, but generally involves the following steps:

  1. Confirm Eligibility: Determine if your property was sold for more than the amount owed (mortgage, taxes, fees, etc.). The court or the officer overseeing the sale holds these funds in a registry of the court.
  2. Monitor the Process: Act quickly, as there is often a narrow window for claiming the funds. The trustee or court officer is generally required to notify the former owner, but you should proactively contact the local county clerk's office or the court that handled the foreclosure to inquire about the surplus.
  3. File a Claim: You must file a petition with the court requesting the release of the funds. This usually requires official legal paperwork, proof of prior ownership (such as a title search), and identity verification.
  4. Resolve Competing Claims: Other parties, such as second mortgage holders or tax authorities (junior lienholders), may also file claims. The court will determine the rightful distribution order, and you may need to dispute these in court. 

Getting Professional Help 

Professional Guidance: While it is possible to recover funds yourself, many homeowners use professional surplus recovery companies to navigate the complex legal procedures and ensure all requirements are met.

At Claylegal Incorporate our focuse is to insure that our clients receive the maximum compensation while providing ultimate professionalism. We do not charge any fees for our services in less we recover the surplus funds for you. If you are in need of professional guidance please contact us. All consultations are free.