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How Subordinate or Junior Lienholders Can Affect The Disbursement Of Florida Foreclosure Surplus Funds

The question I get most often from my clients when I file a claim for Florida Foreclosure Surplus Funds, is when they can expect to receive their money. Well, the answer to that question isn’t that simple. Especially if there are subordinate and/or junior lienholders involved that have an interest to the surplus funds, per F.S. 45.032(1)(b). Subordinate and/or junior lienholders are often the ones to blame for the cause of delay in the disbursement of a former Florida homeowner(s), or Owner of Record’s, claim for Florida foreclosure surplus funds.

First and foremost, the number one thing to consider when a claim for Florida foreclosure surplus funds is filed, and when you will receive your disbursement, is if there are any subordinate and/or junior lienholders that have an interest in said surplus funds and if they have filed a “timely claim” for a portion of the surplus. According to F.S. 45.032 (2),“There is established a rebuttable legal presumption that the owner of record 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.” In layman’s terms, this means that the Clerk of Court will first distribute surplus funds in the amount that the subordinate and/or junior lienholder(s) are entitled to, prior to disbursing them to the former homeowner(s), as long as the lienholder(s) filed a “timely claim” within “one year after the sale” as set by F.S. 45.032 (3)(c).

In addition, should a subordinate and/or junior lienholder file a claim for the Florida foreclosure surplus funds in conjunction with the former homeowner “the Court shall set an evidentiary hearing to determine entitlement to the surplus,” as stated in F.S. 45.032(3)(b). If an “Evidentiary Hearing” must be set, then it can result in a significant delay upwards to a few months (mainly due to the date of the hearing being based strictly on the Judges availability to hear this type of matter) for the former homeowner(s) to receive a ruling on their claim for Florida foreclosure surplus funds.

However, “if the owner of record claims the surplus before the date that the clerk reports it as unclaimed and there is no subordinate lienholder, the Court shall order the clerk to deduct any applicable service charges from the surplus and pay the remainder to the owner of record,” per F.S. 45.032(3)(a). Therefore, if there is not a subordinate and/or junior lienholder with an interest to the surplus funds, then the Court will order the Clerk to disburse the funds, less the applicable service charges, to the former homeowner(s) as long as they have filed a claim “before the clerk of court reports it as unclaimed.” As you can see, Florida foreclosure surplus funds claims filed when there are not subordinate and/or junior lienholders involved can result in a quicker turnaround time for the disbursement of surplus funds to the former homeowner.

If you are a former Florida homeowner and have been notified that there are surplus funds available after the Florida foreclosure sale of your home, please give me a call and I will personally give you a free consultation. If you are unsure if there are surplus funds available after the recent foreclosure sale of your home, please take a look at my blog that discusses how you can locate this information. I represent former homeowners all over the state of Florida no matter what county they are in and I will work tirelessly to help you receive your money. Here at Haynes Law Group, P.A., I represent people on contingency, which means I don’t get paid unless you do!

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