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When Is It Necessary To Intervene In A Florida Foreclosure Surplus Case?

On occasion it is necessary to intervene in a Florida Foreclosure Surplus Case. To “intervene”, means that you want the court to allow you to become an official party to the lawsuit. For a foreclosure surplus case, this usually is because you feel that you should be issued some of those surplus funds that may be left over from a foreclosure sale. According to Florida Rules of Civil Procedure, 1.230, “anyone claiming an interest in pending litigation may at any time be permitted to assert a right by intervention.” An intervention is usually allowed by the courts if argued properly.

There are a few types of interventions that I have seen over the years. I have seen third-party purchasers try to intervene in a surplus case. I have also seen a surplus company intervene because someone assigned their rights over to them in order to receive the funds. Lastly, I have seen and helped clients with intervening in a surplus case because they are heirs to someone’s estate and should receive surplus funds based on their relationship to the deceased party.

The first one to discuss is the third-party purchaser attempting to intervene. A third-party purchaser is someone who has purchased the property at a foreclosure sale and now wants some or all of the surplus back from their purchase. This is most common when someone buys the property at an HOA foreclosure sale and now realizes that there is another foreclosure on the property from the mortgage lender. This means they will not only lose the money they just paid for the property, but they will lose the property itself in the second foreclosure sale.

This is an easy one from my standpoint because it is settled law. Florida Statute 45.032(2) reads, “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 been timely filed a claim.” Furthermore, A great 3rd DCA case from 2014, Pineda v. Wells Fargo, stated that, “Neither the statutes nor the case law governing distribution of surplus foreclosure sale proceeds provides a mechanism authorizing a third-party purchaser to obtain the surplus.” The third-party purchaser simply has no case and even if they are allowed to intervene in the surplus case, the court will not grant them any surplus funds.

Next, you may have been contacted by a surplus company who stated they could get you the surplus funds leftover from a foreclosure sale. They have you sign over ALL of your rights to them. Once your rights to the surplus funds have been signed over, they will file a motion to intervene, collect your money for themselves and (hopefully) someday give you your portion. However, I caution against this because these companies are not lawyers. They do not know the law like a qualified Florida Foreclosure Surplus Attorney. Additionally, they could just simply disappear and take your money with them. They are not bound by the same rules that a lawyer is. Never assign away your rights to Florida foreclosure surplus funds.

The last instance I want to discuss is if you are a direct heir (like children) of someone who has passed away and has left some foreclosure surplus funds waiting to be claimed. Sometimes the heirs are all known, but many times it is more difficult to know who the heirs are. One case in particular I have recently dealt with involves heirs who are not children of the deceased party. This person had no children and also was an only child (no siblings). This means that other relatives needed to be found, such as parents and grandparents, aunts and uncles, or even first cousins. In my case, I filed a motion to intervene on behalf of a first cousin and provided a genealogy chart for the judge.

If you have a Florida Foreclosure Surplus case that you feel is complicated, the first thing you should do is to contact a qualified Florida Foreclosure Surplus attorney. If you are unsure as to whether you are an heir that should receive foreclosure surplus funds left by a deceased relative give me a call for a free consultation. I handle Foreclosure Surplus Funds cases in every County the State of Florida, and I don’t get paid unless you do.

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