Florida Foreclosure Surplus Funds - The Type of Foreclosure Case Can Be a Factor in How Much Surplus Funds You Will Receive

Florida Foreclosure Surplus Funds - The Type of Foreclosure Case Can Be a Factor in How Much Surplus Funds You Will Receive

I handle Florida Foreclosure Surplus Funds cases all of the State of Florida. These could be regular Foreclosures from a Homeowner’s or Condo Owner’s Association, Foreclosure from the Lender, Foreclosure from a Tax Deed Sale, and various other types of Foreclosure cases. These three are the most common though. What type of case makes those Florida Foreclosure Surplus Funds greater and more beneficial to the former owner or family members of the former owner?

Keep in mind that this is just my personal opinion, but I have handled thousands of these cases. Lots of factors are involved in how much you may be eligible to receive, but the biggest factors are how much is owed on the property and how much the property sells for. The most common Foreclosure sale is when your lender (bank) forecloses on the property for not paying the mortgage. Many times, when the property goes to a foreclosure sale, the majority of the original loan is still owed. This means you may still owe hundreds of thousands of dollars. Sometimes the bids at the foreclosure sale aren’t enough to cover the entire amount owed and there is no surplus at all. Other times, if the property is worth enough, then the bids will go over what is owed and there will be some surplus funds.

For instance, if you owed $200,000 to the bank and the property is worth $300,000, then multiple bidders may bid over what is owed knowing that they will be able to resell the property for a profit. The bank is only looking to recoup what is owed to them and they don’t care if the amount goes over as long as they get theirs. However, if the property is only worth $150,000 then they won’t likely bid over that amount, knowing they wouldn’t be able to get their money back on resale. This means that the bank will end up keeping the property after the foreclosure sale and will try to resell it on their own with a realtor.

But what about a HOA or COA foreclosure sale? Most often, when the Association forecloses on a property, they are only looking for a few thousand dollars they are owed on the past due assessments. Often the property sells for a great deal more than what is owed, which leaves the former owner with a large surplus. This means that if the association is only owed $5,000 in past due fees and expenses and the property sells for $100,000 at auction, you are entitled to a much larger surplus of funds. This is also very similar to Tax Deed Foreclosure sales. The taxes might be very low compared to what the property is worth.

Many uninformed bidders at these auctions don’t realize that there may also be a mortgage due on this property and think they are getting a great deal. However, this foreclosure from the association has no affect on the mortgage. The mortgage attaches to the property and the lender cannot go after any of the Surplus Funds from a HOA foreclosure sale because they always have the right to foreclose on the property again on their own.

If the association files its foreclosure action concurrent with the lender’s foreclosure action, then you could be (hypothetically) the recipient of two different Florida Foreclosure Surplus Funds from the same property. This is because Florida Statute 45.033(1) states there is “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”. However, this is also subject to any subordinate lienholders that timely file a claim.

Bottom line is there are many factors in how much your Florida Foreclosure Surplus Funds will be and it is important to hire a qualified attorney who understands the laws and will fight for every penny coming to you. If you believe you have Florida Foreclosure Surplus Funds coming to you from the foreclosure sale of your property or that of a deceased family member, please give me a call for a free consultation. I handle Foreclosure Sale and Tax Deed Sale Surplus cases in every County in the State of Florida, and I don’t get paid unless you do.