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What is a Subordinate Lienholder? And Why Are They Allowed To File A Claim For My Florida Foreclosure Surplus Funds?

Two of the most prevalent questions I have to answer during my consultations with former Florida Homeowners, who are looking to file a claim for Florida foreclosure surplus funds, is:

What is a Subordinate Lienholder? And Why Are They Allowed To File A Claim For My Florida Foreclosure Surplus Funds?

A “Subordinate Lienholder”, according to Fla. Statute 45.032(1)(b), is “the holder of a subordinate lien shown on the face of the pleadings as an encumbrance on the property”. This means that if there is a Subordinate Lienholder who was named as an additional party to a Florida foreclosure case, other than the former Florida Homeowner(s) themselves, such as a second mortgage or construction company, with a recorded lien against the property, then they are, by Florida law, considered a Subordinate Lienholder and are able to file a claim for a portion of the available foreclosure surplus funds. However, it is important to note that Fla. Statute 45.032(1)(b) further sets out that should the Subordinate Lienholder(s) be “paid in full from the proceeds of the sale” then they “shall not be deemed a subordinate lienholder”.

The reason why Subordinate Lienholders are able to file a claim for former Florida Homeowners’ foreclosure surplus funds is simply due to the fact that the Florida Statutes allow them to do so as long as they file a timely claim. Although the reasoning as to why Subordinate Lienholders are able to file a claim for said foreclosure surplus funds is not specifically referenced in Florida Statutes it can be inferred that the Florida Courts are acknowledging the Subordinate Lienholder(s) right to recoup their losses, should they have a recorded lien at the time that the lis pendens, in the Florida foreclosure case, was recorded against the former Homeowner’s Florida property; and should the Subordinate Lienholder(s) file a timely claim. Florida Statute 45.032(3)(c) considers a Subordinate Lienholder’s claim to be timely filed as long as they have filed said claim within one (1) year from the date that the Florida foreclosure sale occurred. This one-year deadline can prove to be extremely frustrating to former Florida Homeowners who have already filed their claim for their foreclosure surplus funds. Subordinate Lienholders and the one-year deadline, imposed by the Florida Statutes, are a few of the many reasons as to why I strongly suggest that former Florida Homeowners consult with an experienced Florida foreclosure surplus funds recovery Attorney prior to filing their claim for their Florida foreclosure surplus funds.

If you are a former Florida Homeowner looking to file a claim for your Florida foreclosure surplus funds and are in competition with a Subordinate Lienholder’s claim, please give me a call and I will personally give you a free consultation.

At Haynes Law Group, P.A., we have experienced Attorneys who are well versed in the Florida Statutes governing former Florida Homeowners claims to Florida foreclosure surplus funds, and have helped to recover hundreds of thousands of dollars for former Florida Homeowners. We represent former Florida Homeowners all over the state of Florida, no matter what county they are in, and will work tirelessly to ensure that you receive the Gold Standard of Legal Service. Best of all, we represent our Clients on contingency which means we don’t get paid unless you do!