What Do You Do When You Have Been Foreclosed On?

Most of our practice is Foreclosure Defense. This means we work to try to keep your bank or lender from foreclosing on your home. However, many of our clients come to us after they have already been foreclosed on and their home has been sold at auction.

Having your home sold at a foreclosure auction is probably one of the most stressful times a person or family can go through. But there may be some light at the end of the tunnel if there is a surplus from the sale. This means that if your home sold for more than what was owed on the mortgage, you may be entitled to what is left over. For example, if your home was sold for $250,000 and you owed $200,000, you would be entitled to the remaining $50,000 (minus some other court fees and costs).

These excess funds may make the burden of moving or renting a little easier to handle. You can use these extra funds to rent after you have moved out, or it could also be used as a down payment on a new home. Florida Statute 45.033 states that there is a rebuttable presumption that the owner of record on the date of filing a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.

The owner of record would be the person who has been foreclosed on (generally you). Subordinate lienholders are any entities that have placed a lien on the property. These entities are first and foremost the Mortgage company that you used to finance the purchase of your home and that filed the lis pendens or initial foreclosure case against you. Any other lien holders could be your Homeowners Association, any company you hired to do work on your home such as a new roof, or even the local government if you have not kept up on your property taxes. Does this mean they will automatically get your surplus funds? Not necessarily.

These lienholders must file their claims timely. If these subordinate lienholders have not filed their claims within a certain period of time, then you get the remaining surplus. If you are absolutely sure there are no subordinate lienholders, then you may be able to get your surplus funds much quicker. It is also important to note that these subordinate lienholders can be the ones who file the foreclosure case against you.

For instance, if you stop paying your property taxes or your HOA/COA fees, you can be foreclosed on by one of those subordinate lienholders. Once your property has sold, the first in priority is still going to be your Mortgage company. Since they provided the money for you to purchase your home, they get paid first. Even if the HOA/COA filed and won their foreclosure case, they are still a subordinate lienholder and get paid second. This means that if you owe the Association $10,000 and the Mortgage lender $125,000 and your home sold for $150,000, the Mortgage lender gets their money first and the Association gets theirs second. What remains still goes to you as the owner of the property at the time of the lis pendens.

Because of all the rules and regulations surrounding Foreclosure Surplus Funds, it is important to hire a qualified professional. If you have been recently foreclosed on and your home was sold at a foreclosure auction or if you are an heir to a deceased family member whose home was foreclosed on and sold at auction, call the Haynes Law Group, P.A. for a free consultation. We practice all over the State of Florida and will take your case no matter what county you live in. We don’t charge any fee up front and will only get paid if we win and collect the funds for you.

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