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What are surplus funds in a foreclosure?

What are surplus funds?

Surplus funds, also referred to as overage or excess funds, are the funds remaining after a mortgage is paid through the final judgment of a foreclosure auction.
The trustee appointed in the foreclosure auction is responsible for disbursing the funds without charging additional fees.

I believe I am entitled to surplus funds. What do I do?

If you owned the home prior to the foreclosure and believe you may be entitled to surplus funds, you should communicate with the trustee soon after the auction takes place.
The trustee contact information can be found on the Notice of Trustee Sale. A copy of this notice may be retrieved from the local recorder office if needed.

Who else gets paid before I can access surplus funds?

Junior lienholders are paid in their order of seniority before the prior homeowner(s) can receive any remaining monies.
Prior homeowners can dispute lienholders in court. The trustee turns over the funds to the court if a complaint is filed.

How much time do I have to claim surplus funds?

Trustees have 30 days from the auction to notify all interested parties (such as second mortgage holders, tax lien holders, or credit card lien holders) of the possible surplus funds via mail.
Interested parties (including you) have 30 days from the notification to assert their claim. Failure to respond within the 30-day deadline can result in losing rights to funds. 

Do I have to pay someone to collect surplus funds for me?

No. The trustee appointed in the foreclosure auction is responsible for disbursing surplus funds without charging additional fees.
The foreclosure process is public information. Anyone reviewing the public notices will know if there are surplus funds. People who may be operating illegally sometimes reach out to prior homeowners and charge unreasonable fees for collecting surplus funds.  
If you receive one of these inquiries, you should conduct your own investigation to confirm if the individual contacting you is licensed to conduct such business.

What happens to surplus funds if I don’t receive a notification?

Trustees forward surplus funds to the state’s unclaimed property division if they’re not able to contact the prior homeowner(s).
Californians may inquire about unclaimed surplus funds with the California State Controller at 1 (800) 992-4647.
Remember: prior homeowners are notified of possible surplus funds via mail. It is important for you to report a forwarding address with the U.S. Post Office once you vacate the foreclosed property.

Where else can I get help with accessing surplus funds?

If you are a California resident and need help retrieving surplus funds, you can contact California Rural Legal Assistance, Inc. (CRLA).
Our statewide Fair Housing and Foreclosure Program may be able to assist.

Call your local CRLA office for assistance >

This material is based on work supported by the Department of Housing and Urban Development (HUD) under Grant FEOI1900385. Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of HUD.



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