Overages, Surplus Funds, Excess Proceeds and Left Over Money after a Foreclosure or Trustee Sale
There’s more than $40 billion sitting with state governments, have you ever wondered or contemplated the idea if any of it yours?
We Specialize in Foreclosure Refunds
Surplus Refund is Here to Help You with Your Claims
In today's fast-paced financial world, it's surprisingly common for individuals to have unclaimed property waiting for them. At Surplus Refund LLC, we're committed to helping you understand and navigate the process of reclaiming what's rightfully yours.
What are Surplus Funds?
When your property goes through foreclosure, whether due to unpaid taxes or mortgage defaults, you might be entitled to money that's rightfully yours. These funds go by several names - surplus funds, overages, excess proceeds, or simply "leftover money" - but they all refer to the same thing: money that remains after a foreclosure sale that legally belongs to you, the former property owner.
What Are Surplus Funds?
Surplus funds are the excess money generated when your foreclosed property sells for more than what was owed in taxes, mortgage debt, and associated fees. Here's how it works:
When a property goes to foreclosure auction, it may sell for an amount higher than the total debt owed. After the government or lender recovers what they're owed - including back taxes, penalties, interest, and administrative costs - any remaining proceeds legally belong to the former property owner.
For example, if you owed $15,000 in back taxes and penalties on a property, but it sold at auction for $50,000, you would be entitled to claim the $35,000 difference (minus any additional administrative fees).
Why Do Surplus Funds Exist?
Properties often sell for more than the debt owed for several reasons:
Market Value Recovery: Properties may have appreciated in value since the debt was incurred
Competitive Bidding: Multiple interested buyers can drive auction prices higher
Investment Interest: Real estate investors often bid above minimum amounts for properties in desirable areas
Undervalued Debt: The total amount owed may be significantly less than the property's fair market value.
Different Types of Foreclosure Proceeds
Tax Foreclosure Surplus.
When properties are foreclosed for unpaid taxes, former owners may be owed substantial amounts - "Some people are owed maybe $1,000, but then we've seen numbers in the $20,000s, even the $100,000s." These funds accumulate when tax-foreclosed properties sell for more than the back taxes and associated costs.
Mortgage Foreclosure Excess Proceeds
Similar to tax foreclosures, when a mortgage lender forecloses and the property sells for more than the outstanding mortgage balance and costs, the former homeowner is entitled to the surplus.
Judicial vs. Non-Judicial Foreclosure Proceeds
The process and timeline for claiming surplus funds can vary depending on whether your state uses judicial or non-judicial foreclosure procedures.
Your Legal Rights to These Funds
Recent court rulings, including decisions by the Michigan Supreme Court, have reinforced that surplus proceeds from tax foreclosure sales are unconstitutional for counties to keep. This means that regardless of how long it's been since your foreclosure, you maintain legal rights to any surplus funds generated from your property's sale.
Common Challenges in Claiming Surplus Funds
Time-Sensitive Deadlines
Many jurisdictions impose strict deadlines for claiming surplus funds, such as March 31st deadlines for certain foreclosure proceeds. Missing these deadlines can result in permanently losing your right to these funds.
Complex Paperwork Requirements
The claim form is often "just one step in a lengthy process," requiring proper documentation, notarization, and sometimes multiple submissions to different offices.
Lack of Notification
Many former property owners never receive proper notification that surplus funds are available, leaving thousands of dollars unclaimed indefinitely.
Administrative Hurdles
Property owners may be required to "proactively file notice" and complete specific state-provided forms within certain timeframes.
Who Can Claim Surplus Funds?
Surplus funds can typically be claimed by:
Former Property Owners: The primary party entitled to surplus proceeds
Heirs and Beneficiaries: If the original owner has passed away, their legal heirs may claim the funds
Creditors: In some cases, "creditors that the owner may have had before the foreclosure process was initiated" can also participate in the surplus funds process
Lienholders: Parties who held valid liens against the property may have claims to portions of the surplus
Steps to Claim Your Surplus Funds
1. Determine If You're Owed Money
Research whether your foreclosed property generated surplus funds by contacting the appropriate county office or checking online databases.
2. Gather Required Documentation
Collect documents proving your ownership of the property, including:
Property deeds
Tax records
Foreclosure notices
Death certificates (if claiming for deceased relatives)
Identification documents
3. Complete Claim Forms
Obtain and properly complete all required claim forms, ensuring they're notarized when necessary.
4. Submit Within Deadlines
Submit your notarized forms "by mail or in person" to the appropriate county office before any applicable deadlines.
5. Follow Up
Monitor the status of your claim and respond promptly to any requests for additional information.
Why You Should Act Quickly
Time is critical when it comes to surplus funds recovery. Many jurisdictions have strict deadlines, and if "you've recently gone through a foreclosure or tax sale, you might be entitled to surplus funds" that could be lost forever without prompt action.
Additionally, the longer you wait, the more difficult it becomes to locate necessary documentation and meet increasingly complex requirements.
Professional Assistance
Given the complexity of surplus funds recovery and the potential for significant financial recovery, many people benefit from professional assistance. Experienced surplus funds recovery specialists understand the intricate requirements, deadlines, and procedures specific to each jurisdiction.
Conclusion
Surplus funds represent money that legally belongs to you after a foreclosure sale. Whether called overages, excess proceeds, or leftover money, these funds can provide crucial financial relief during difficult times. Understanding your rights and acting promptly to claim these funds can mean the difference between losing money forever and recovering thousands of dollars that are rightfully yours.
Don't let bureaucratic complexity or missed deadlines cost you money that belongs to you. If you've experienced foreclosure, investigate whether surplus funds are available and take action to claim what's rightfully yours.