What Happens After Foreclosure in California?
Foreclosure is quite common in California, but not many people know that they are entitled to receive surplus funds if any equity remains after the trustee sale. Under California foreclosure law, any sale funds that exceed the balance of the loan, and the associated fees, must be returned to the prior owner.
Surplus Funds after Foreclosure Is Not Always Evident
The sale trustee is required to tell prior owners about any surplus resulting from the foreclosure sale. If you lost your equity in a foreclosure sale, it is essential that you have the right information for claiming surplus funds after foreclosure. You can contact a real estate attorney for detailed assistance on this process.
What Is Equity?
When the balance of mortgage falls below your property’s appraised value, the difference is equity. There is more equity in sales occurring now than past sales, due to a recent increase in home values.
What Are Surplus Funds?
During the auction at foreclosure, the property is priced by the lender for the loan balance adding the fees for foreclosure. Suppose the fair market value of your property is $200,000 and you owe $100,000 then the additional $100,000 is surplus funds. According to California Civil Code 2924(k), any surplus fund has to be paid out to the prior owner. Thus, you are entitled to receive California surplus foreclosure funds, if you had equity at the time of the sale.
Surplus Deductions and Associated Fees
A real estate attorney can help with the collection of surplus funds on foreclosure. From the surplus fund itself, the fees for the foreclosure attorney and trustee are deducted. After this, the money is distributed by the trustee for paying the mortgage’s remaining balance. When the payment to the lender is made, funds are distributed by the trustee to any junior lien holders. After the payment of all these fees and obligations, the owner can claim the remaining surplus.
The Process for Filing a Surplus Funds Claim
The process to claim surplus is technical and time-consuming. There are several aspects that are difficult to handle without knowledge of the process. To expedite the claim, it is important that you hire a real estate lawyer who is experienced and efficient in foreclosure surplus claims in California. Our real estate attorney gives free advice and information for claiming surplus funds after foreclosure sale.
It is always best to consult a real estate attorney first to get detailed information for claiming surplus funds after foreclosure sale. If you know that you property had significant equity, our attorney can file a claim and also help you with any eviction matters after a foreclosure takes place. This will ensure that you can maximize the time in the house and the money you will get due to property sale.