What are surplus funds?
When a property is sold at a forced sale, such as a mortgage foreclosure, a sheriff’s sale, a trustee’s sale or a tax sale, the sale pays off what was owed. If the winning bid is higher than the debt, costs and valid liens, the remainder is surplus funds.
Who is entitled?
Usually the former owner of record. Junior lienholders may have claims first, and heirs or an estate may claim if the owner has passed away.
Who holds the money?
Depending on the state and sale type, it may be the foreclosure trustee, the clerk of court, the county treasurer or tax collector, or, after time passes, the state’s unclaimed property office.
Foreclosure vs. tax sale
Mortgage foreclosures can be judicial (through a court) or non-judicial (through a trustee). Tax sales happen when property taxes go unpaid. In 2023 the U.S. Supreme Court held in Tyler v. Hennepin County that a county can’t keep more than the tax debt, and many states have updated their laws since.
Deadlines
Many states set claim deadlines, and after that the money may go to the county or state. Rules vary by state and county, and we’ll check yours for free.
Illustration only. The real amount is set by the court or county record after valid liens and costs.