What is Excess Funds
Excess funds could be defined as the money left over upon the satisfaction of any liens (if applicable) and any associated costs related to the foreclosure sale of the property. Federal and State Law enable the lien holder (mortgage company, tax entity, etc.…) to only dispose from the amount that is owed. Hence, the reason for a foreclosure sale: to satisfy a debt. Now the question is, what happens with the remainder? Here is the good news, the remainder is yours as long as you claim it in time.
Let’s illustrate the concept with a basic example : John bought a property in 2004 with a mortgage for $150,000. In 2021 the balance of the loan was $85,000, for some reason in 2021 John stop making the payments and the bank started the foreclosure process. During the foreclosure process (typically takes a few months) missed monthly payments, plus late fees and attorney costs. All these are also accrued, and it is now money owed to the bank.
Let’s say this amount totals to $15,000, John now owes a total of $100,000 ($85,000 + $15,000). In 2023 the bank sells the property at auction to satisfy the total debt of $100,000. Their only purpose is to satisfy the total debt. If the property is sold at auction for $210,000 the difference between the sale price and the total debt (which is $110,000 in this example) is called excess funds. This difference does not belong to the bank, it belongs to John.
John needs to understand two things, the 1st one is that he is entitled to the funds and the 2nd one is that the funds need to be claimed within a reasonable time frame, otherwise the public agency will seize it.
We encourage John to hire a trusted foreclosure specialist to assist with the process. Excess Funds Recovery LLC is your vehicle to recover what is yours in an expedited manner.