Florida Foreclosure Surplus Funds: Lender Sold Property for Profit After Buying it Back at Foreclosure Auction

Representing Homeowners

Lately, I’ve been receiving calls from prospective clients seeking a consultation for surplus funds, in which, they are seeking to recover “surplus funds” from the Lender’s profit from their sale of a certain property after the Lender already “re-purchased” said property at foreclosure auction. Today, I will be explaining why the Lender’s profit, after their conventional sale of a foreclosed property, is not considered surplus funds and why we will not be able to file a court case to recover said surplus funds.

To begin, I want to explain what Florida foreclosure surplus funds are. According to Fla. Statute 45.032(1)(c), surplus funds are “the funds remaining after payment of all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements.” Surplus funds are usually a result of a bidding war, in which, two prospective buyers attempt to outbid each other for a certain property (being sold at a foreclosure auction) and the final bid being over the amount of the final judgment that was entered in the foreclosure action.

For example: For example: If there is a final judgment of foreclosure entered against a Florida property in the amount of $50,000 and the Florida property is sold at a Florida foreclosure auction in the amount of $100,000, then there will be a surplus of funds in the amount of $50,000! Fla. Statute 45.032(2) states that “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…”

Moving on, what happens if the Lender is the one who successfully bids on the property that is being foreclosed and the amount does not exceed the final judgment amount? The answer in layman’s terms is nothing and there will not be any surplus funds available to be claimed. In fact, should this be the case then the Lender will become the new owner of the property and may do as they wish. More than likely, the Lender will make repairs to the subject property, if necessary, and will then list it for sale in an attempt to recoup some of their lost revenue from the foreclosure proceedings. If the subject property is sold for a profit, then the Lender is entitled to said profit as they are now the legal title holder of the subject property being that it was “purchased” at a foreclosure auction. Therefore, the profit that the Lender makes from this sale is not considered surplus funds and is not able to be claimed in Court as they are not the result of a foreclosure sale but instead a conventional sale.

If you are reading this as a former Florida homeowner whose home has recently been sold at a Florida foreclosure auction and would like to know if there are surplus funds available for you to claim, then please give me a call and I will personally give you a free consultation. During our consultation, I will confirm whether there are surplus funds available to be claimed as well as answer any questions that you may have. If there are surplus funds available to be claimed, then I will also provide you with a personalized strategy as to how we can assist you with the filing of your claim. If you have been contacted by “Third-Party Surplus Funds Recovery Companies,” then I recommend that you consult with an experienced Florida surplus funds recovery attorney right away; and DO NOT sign anything!

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 claim millions of dollars for former Florida homeowners. We represent former homeowners all over the state of Florida no matter which county they are in and will work tirelessly to ensure that you receive the Gold Standard of Legal Service.
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