What are Foreclosure Surplus Funds?

Foreclosure surplus funds, also known as “excess proceeds,” are the funds that are left over after a property has been foreclosed on and sold by a lender in order to recover unpaid mortgage debt.

When a borrower defaults on their mortgage, the lender can foreclose on the property in order to sell it and recoup their losses. If the sale of the property generates more money than is needed to pay off the outstanding mortgage debt, any remaining funds are considered surplus.

These surplus funds may be owed to the homeowner, depending on state law and the specific circumstances of the foreclosure.

In some states, the homeowner is entitled to receive the surplus funds after the sale of the property.

In other states, the lender may be entitled to keep the surplus funds.

It’s important for homeowners to understand their rights and the laws that apply to surplus funds in their state in order to determine if they are entitled to receive any money back after a foreclosure.