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Junior Lienholder Foreclosure Sale Surplus - What happens if you wait too long to collect your Florida Foreclosure Surplus Funds.

Sometimes people contact me after they have already lost their fight for their Florida Foreclosure Surplus Funds and all I can do is tell them they should have contacted me first. Why would someone lose those funds if they, by law, belong to them? This is a cautionary tale. When a Junior Lienholder (also called a Subordinate lienholder) forecloses on a property, they are only looking to get paid for what they are owed. This could be a relatively small amount owed to a roofing company, plumber, or your Homeowner’s Association (HOA).

When they foreclose, they aren’t concerned about how much your property is worth or how much you owe to your Mortgage Lender. They just want the few thousands you might owe them. This means that if you owe your HOA $10,000 in past due assessments and attorney’s fees, that is all they will be asking for during the foreclosure sale. Your home might be worth $350,000. This means that if your property sells for $100,000 (or much more) at the foreclosure sale, then the HOA makes their $10,000 and then there is a surplus of $90,000. That surplus should go to you based on Florida Statute 45.033(1), which states, “There is established a rebuttable presumption that the owner of record of real property 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.”

As long as there are no other lienholders making a claim, then the surplus goes to you, the former owner. But there is something to watch out for. Sometimes, the third-party purchaser from the sale of the property could ask the court for the money. They don’t always get it because by Florida Statute and by case law, they are not entitled to a single cent of those Florida Foreclosure Surplus Funds. That won’t stop them from trying though. Sometimes these third-party purchasers will ask the Court for the Surplus in order to pay off the mortgage that might still be encumbering the property. If you had a mortgage on the property at the time the junior lienholder foreclosed on your property and sold it, that mortgage is still on the property and the third-party purchaser has to pay it off or the property will be foreclosed on again by the Senior lienholder.

This scenario has prompted third-party purchasers to petition the courts for those surplus funds. Sometimes if a judge doesn’t know the law (like I do) and no one is there to fight for the former owner, this third-party purchaser may prevail. If the former owner doesn’t appeal within a certain amount of time, then that money is gone forever. Trust me, this happens all the time. This is why it is absolutely necessary to contact a qualified Florida Foreclosure and Tax Deed Surplus Attorney like me. I know the law better than those surplus recovery companies who may have been contacting you and I know it better than many of the judges. And if you don’t hire the right person to fight for you or you don’t do anything at all, you could be out a great deal of money. It is important to get working on your case right away even if we must wait a while to get those Florida Foreclosure Surplus Funds. If someone else makes a claim for those funds, then I can start a gaime plan and help to make sure they are following the law to the letter or make sure they don’t get anything in some cases.

If you have lost your home due to Foreclosure anywhere in the State of Florida and you believe you have Surplus funds available to you, please give me a call for a free consultation. I handle Foreclosure and Tax Deed Surplus Funds cases in every County in the State of Florida, and I don’t get paid unless you do.

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