Surplus Recovery Agents for Foreclosure Surplus Funds

Surplus Recovery Agents

When going through a foreclosure auction, it is important to know what a surplus recovery agent does and how they help recover excess equity after the property has been sold. Surplus Funds can be claimed by the foreclosed homeowner when excess funds  / proceeds are left over after the sale of the property. Any foreclosure resulting in Surplus funds requires those funds to be deposited with the court, and it is the homeowner’s responsibility to claim the equity remaining from the surplus. It’s best to contact a real estate attorney for a more thorough explanation if your home has recently been foreclosed. Here at Consumer Action Law Group, we have experienced foreclosure attorneys ready to help you resolve this issue and get the money you’re entitled to.

What are Surplus Funds?

When a foreclosure auction occurs, if the property is sold for more than the amount of any liens owed then this excess amount is what is known as surplus funds. These surplus funds are held for the person who lost the property and can recoup the funds. Unfortunately, some people are not familiar with foreclosure laws and do not realize they are entitled to collect the excess funds.

If you live in California, the California Civil Code 2924(k) states that any surplus fund has to be paid out to the prior owner. That said, if there is equity on the property then you are entitled to receive California surplus foreclosure funds.  Homeowners are often not informed about the money that is owed and the recovery process which requires those funds to be deposited into the state court if not claimed immediately from the foreclosure trustee.


A surplus recovery agent is someone who tries to recover the surplus funds that belong to the prior owner. Sometimes trying to recover this amount can be difficult and surplus recovery agents can help you recover the funds, but recovery of surplus funds is a legal process, and it is usually better to hire a lawyer than a non-licensed recovery agent.

When facing foreclosure, some recovery agents put pressure on homeowners to assign their rights to become the beneficiary of the owner for proceeds from the home that was foreclosed.  In some instances this may be deemed illegitimate, particularly if the agent convinces a person to sign over their rights to the surplus funds with little or no benefit to the homeowner. Homeowners should be aware of any false claims that the homeowner has limited or no rights to the surplus funds, and there is no requirement by law for a surplus recovery agent to recover funds.

Surplus fund fraud does occur and it is the right of the homeowner to collect from the foreclosure trustee in a timely manner. Knowing this, it is best to contact a licensed attorney to handle your situation and retrieve the surplus funds on your behalf.

How Surplus Funds Can be Recovered?

Foreclosure sales are usually handled by a trustee. The amount that is paid and sold for the property is documented by the trustee and upon sale the trustee should notify the prior owner of excess funds to be collected after deducting costs and liens. Many property sales are sold for more than the cost of the remaining mortgage, which makes surplus money available for most homes under foreclosure. Many homeowners do not receive notices of surplus funds after the foreclosure sale when the home is vacated and there is no valid forwarding address.

To start a claim for your surplus funds, you will need to gather all important documents and start the claim process.  To make a request for your excess funds, in most cases, you need to file your claim with a copy of the deed of your prior property, a copy of your Social Security Card and also a copy of state-issued ID. Once you have gathered all the necessary documents, you can start the claim process by filling out the required claim form [usually provided by the trustee or the court].  In some cases, this form can be found online on your county’s website and usually needs to be notarized. Once everything is completed, you will need to submit the required documents to the trustee or to the court where the foreclosure occurred and the funds were deposited.

Talk to a Surplus Recovery Lawyer Regarding Your Surplus Funds

The legal process can be very technical and time-consuming, but the surplus fund recovery attorneys at Consumer Action Law Group help homeowners by making sure that your money ends up in your hands. Prior owners can count on our real estate attorneys to fully explain the process and move the process forward and avoid surplus recovery agent fraud. Any foreclosure with equity in the home is worth questioning with a surplus recovery attorney. There is no cost in making a claim to see if you qualify and may recover your money after foreclosure.

If you think you may be entitled to receive surplus funds, please call our firm at (818)-254-8413 and we will provide a free consultation immediately.

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