Foreclosure Surplus: What is it and am I entitled to receive?

In a foreclosure lawsuit, after a foreclosure sale of the property is held and after the proceeds from the sale of the property have been distributed as required by the Final Judgment of Foreclosure, there are leftover or extra funds. These funds are called surplus funds. The Clerk of Court will file a Certificate of Disbursements that can be located on the Court’s docket website that would show the amount of funds that would be categorized as surplus funds.

Pursuant to Florida Statute § 45.032(2), “There is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” This means that if you owned the property that was the property involved in the foreclosure lawsuit where it was determined that the surplus funds existed and you owned that property on the day that the lis pendens (formal notice of pending legal action) for the foreclosure lawsuit was filed, then you are considered to be the owner of the record and are eligible to make a claim for the surplus funds. Owners of record may also grant or assign their legal right to make a claim for the surplus funds.

In the case of surplus funds, sometimes subordinate lienholders will also make claims for the surplus funds. Subordinate lienholders include but not limited to “a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien” as defined in the defined in the Florida Statutes. These lienholders are often named Defendants in the case, and you may be familiar with them as your homeowner or condominium association or second mortgage holders. These subordinate lienholders may make claims on the surplus if the full amounts of their liens were not paid from the proceeds of the foreclosure sale and as such, they seek to be paid out from the surplus funds.

It is also common that the Plaintiff in the foreclosure lawsuit will have incurred additional costs or fees after the foreclosure sale. Provided that the Final Judgment of Foreclosure allows for Plaintiff to seek these amounts and provided that Plaintiff provides evidence in support of the additional costs or fees sought from the surplus funds to the Court, Plaintiff may also make a claim for the surplus. If you are in a situation wherein a foreclosure sale has been held and you would like to know if you are entitled to make a claim for the surplus funds, please contact us.

Our Florida foreclosure defense lawyers have helped over 7,000 South Florida homeowners and consumers with their debt problems, we have saved over 3,000 homes from foreclosure, eliminated more than $100 million dollars in mortgage principal and consumer debt, and recovered over $25 million dollars on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact our Fort Lauderdale foreclosure defense lawyer for a free consultation to see how we may be able to help you.