Surplus Funds and Power of Attorney: What You Should Know

Hazel Karen Nicolas Gonzales
2 days ago
3 min read

Understanding how POA authority works in foreclosure surplus recovery

When a property goes through foreclosure and sells for more than the amount owed, the extra money—called surplus funds—belongs to the former homeowner or their rightful heirs. But what happens if the homeowner is unavailable, incapacitated, out of state, or needs someone to act on their behalf?

In these cases, a Power of Attorney (POA) can play an important role. However, not all POAs are the same, and not all are accepted for surplus fund claims. Here’s what you need to know before using a Power of Attorney to recover excess proceeds.

What Is a Power of Attorney (POA)?

A Power of Attorney is a legal document that gives one person (the agent) the authority to act for another person (the principal). The agent can sign documents, submit forms, communicate with courts, and handle certain legal or financial matters on behalf of the principal.

In surplus fund recovery, a POA may allow someone to:

File the surplus claim
Communicate with the county or court
Sign affidavits or required documents
Receive updates on the claim status

However, using a POA for surplus funds comes with strict rules.

Not All POAs Are Accepted for Surplus Fund Claims

Counties and courts typically only accept POAs that specifically authorize real estate, financial, or legal matters. A generic POA sometimes isn’t enough.

Many counties require:

A durable financial POA
A specific POA authorizing the agent to recover surplus or excess proceeds
A notarized and properly executed document
Sometimes, court approval if the homeowner is incapacitated

Some jurisdictions may reject POAs entirely if they believe the homeowner is being exploited, especially seniors or vulnerable adults.

When a POA Does Work for Surplus Claims

A Power of Attorney will generally be effective if:

✔️ The homeowner is alive and willingly grants authority

✔️ The POA specifically includes authority over financial or real estate matters

✔️ The document is notarized and valid under state law

✔️ The agent can provide proper identification

✔️ The court determines the POA is not being misused

In these cases, an agent can legally and successfully claim surplus funds on behalf of the homeowner.

When a POA Cannot Be Used

A POA usually cannot be used if:

✘ The homeowner has passed away (POA becomes void at death)

✘ The POA is not notarized

✘ The POA does not include the right type of authority

✘ The county suspects fraud or coercion

✘ There are multiple competing agents or conflicting documents

If the homeowner has passed away, the process falls under heirship or probate, not POA.

Surplus Funds and POA Fraud Prevention

Counties have become more cautious due to rising fraud cases involving POAs and surplus proceeds. As a result, they may require:

Additional proof the homeowner is aware of the claim
Direct confirmation from the principal
Extra affidavits or certifications
A background check on the agent (rare, but possible)

Having proper guidance ensures your POA is accepted without delays.

How Surplus Refund LLC Helps With POA-Based Claims

At Surplus Refund LLC, we routinely assist clients who need to recover surplus funds using a valid Power of Attorney. Our support includes:

Reviewing your POA to ensure it meets county requirements
Preparing all documents correctly to avoid rejection
Communicating with the courts on your behalf
Protecting principals from fraud or predatory claimants
Guiding families when a POA is not enough and probate is required

With our experience, we help prevent mistakes that can slow down the process—or result in claim denial.

Conclusion

A Power of Attorney can make the surplus fund recovery process much easier—if it is correctly prepared and legally acceptable. Whether you’re helping a family member, managing affairs from out of state, or acting as someone’s agent, knowing how POA authority works is essential.

If you’re unsure whether your POA qualifies, or if you need help handling a surplus claim, Surplus Refund LLC is here to assist you every step of the way.