What should I do with my escrow refund check?
If you are involved in a foreclosure, you probably don’t anticipate having any money left once your home or property is auctioned off. In fact, you are probably expecting to owe money. However, you might have money coming to you in the form of surplus funds.
What Is Meant By Surplus Funds?
According to Investopedia, the term surplus funds refers to the amount of an asset that is more than the portion used. A surplus can be used to describe many types of excessive income or assets. It can refer to money left over from a budget, or funds remaining after a mortgage is paid off.
What Is A Surplus On A Mortgage?
When the bank auctions your property, it will try to sell the home for as much as possible. Sometimes, your home sells for more than what you owe on the mortgage. This excess amount is known as a surplus. You have the right to claim surplus funds after a foreclosure. However, most people are not aware of this fact.
The Denver Post reported on a man Barry Gragert who lost his home to foreclosure right after the death of his wife. After the foreclosure, Gragert was living in his car. The 63-year-old veteran had no idea that he was owed $50,000 in surplus funds from the foreclosure. The money had been sitting with the Arapahoe County officials for years. He only found out that he had money owed to him when the Denver Post informed him of the fact.
Gragert later said that he never knew he had money coming. He stated that he just walked away from his home, broke and sad. Gragert was not the only homeowner that had money coming to him. In the course of its investigation into surplus funds overages, the Denver Post found six more families that were each owed at least $18,000 in surplus funds.
Unfortunately, this is a real shame for any homeowner involved in foreclosure as the excess surplus funds would certainly come in handy for deposit and rental fees on a new apartment or home.
How To Claim Foreclosure Overage
Most state laws require that foreclosure overage funds be handed over to the property owner after all the debts on a property are paid. However, when there are excess surplus funds, most local governments make little effort to locate the former owner. They are usually required to send a notice to a homeowner informing them of the money. However, the last known address on file for the former owner is the house that they were forced to leave.
Sometimes, ads are placed in the local paper, but these often go unnoticed. Most local counties don’t have the resources to look for homeowners that have surplus funds coming to them. It is rare that a county contacts a homeowner directly about surplus funds says the Denver Post. So, how can you claim an overage check that is owed to you? The first step is to understand what is the meaning of surplus money.
Surplus Disbursement From Mortgage Company
When your property is auctioned, the auctioneer will open the bidding with a minimum bid. Usually, but not always, the bid is set by the mortgage company. Because foreclosure auctions often attract a large number of investors, the bidding can become competitive especially if the property has real potential as an investment.
If the home has a lot of potentials, there is a chance that it could go for more than what you owe on it. So, if this happens, the mortgage lender will be paid first. If there is anything left after the mortgage is paid, then any additional liens or judgments against the property will be paid off. If money is left after all monies are paid to lienholders, then the homeowner can claim the surplus funds.
What is a Surplus Disbursement Check?
A surplus payment check will be issued to you if there is any money left over from the sale of your home. If you believe that you are owed a surplus, it is important to act quickly and diligently follow-up. In some states, homeowners only have a window of time to make a surplus claim after the foreclosure sale has completed.
For instance, in Florida, there is a 60-day deadline for requesting surplus funds. If you don’t claim within that period, your rights to the money can be lost. This rule varies though, so it is imperative to check with an experienced surplus funds lawyer in your area to find out the laws in your state.
A surplus funds attorney can also help you file the paperwork and court motion for surplus funds. Sometimes the funds are deposited with the county clerk, and a motion is needed to get the funds released. An attorney will know how to file the motion correctly. An attorney can also help you file any motions required to have the surplus disbursed when there are junior lienholders on the property.
To speak with a surplus funds attorney today, contact us at (323) 842-1582. Our network attorneys can help you recover the money that owed to you.
