Florida Foreclosure Surplus Funds - What Factors May Reduce the Amount of Surplus Funds You are Entitled to?

Representing Homeowners

When I am hired by a new client to help them retrieve their Florida Foreclosure Sale Surplus Funds from the Clerk of Court, there are many factors that play into how much of those funds are actually retrievable. This can depend on how long it took for the foreclosure sale to happen or how many (if any) subordinate lienholders have made a claim. It can also depend on whether any other family members (heirs) have a right to those funds if the original owner has died.

For starters, Florida Statute 45.032(2) states, “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.” However, this isn’t the beginning of where you need to look. I say this because the plaintiff in the case may be entitled additional fees and costs that are incurred between the final judgment of foreclosure and the foreclosure sale date. Often, homeowners will file for bankruptcy multiple times in order to hold off the foreclosure sale date so they can work something out with the lender through the federal bankruptcy court. If the lender’s attorney has to continue to work on the case, they will be entitled to additional attorney’s fees. Additionally, there is a statutory interest rate that begins to build after the final judgment and the foreclosure sale date that the lender is entitled to receive. This statutory interest rate can continue to build for months or years and can add up to a substantial amount.

Next, subordinate lienholders who have “timely made a claim” have the opportunity to petition the court for some of the Florida Foreclosure Sale Surplus Funds. These subordinate lienholders could be Homeowner’s or Condo Owner’s Associations if their assessments haven’t been paid. They could also be judgment lienholders, second mortgage holders, construction liens, etc. Generally speaking, these subordinate lienholders have a full year to make a claim for the surplus funds. However, it often happens that these potential subordinate lienholders are no longer in business, or they are just not interested. They may have been defaulted in the foreclosure case because they never filed a response as a defendant in the case. Additionally, there is caselaw out there that states if a subordinate lienholder doesn’t make a claim prior to the foreclosure sale, they may be barred from making any claims to the surplus funds.

Lastly, if there are other family members who are trying to make a claim to the Florida Foreclosure Sale Surplus Funds as heirs to a deceased party, it is important to make sure they actually have a claim. I have successfully been able to prevent family members who were not rightful heirs from getting at funds that rightfully belonged to my clients. For instance, I was hired by the son of a man who died intestate (without a will). At the time of his death, he was not married as his wife, my client’s stepmother, had died about 5 years before. The stepmother’s daughter, my client’s stepsister, had hired one of those shady third-party recovery companies to get the surplus funds. I did some research and found the deed to the property named my client’s father and stepmother as joint tenants with right of survivorship. This means at the moment of the death of the stepmother, my client’s father received full ownership of the property. That cut off any potential heirs of the stepmother completely. Since my client’s father owned the property in full at the time of this death, that meant that my client received the full amount of the Florida Foreclosure Sale Surplus Funds. I contacted the attorney for the third-party surplus company and presented him with my evidence and he withdrew their motion for surplus funds. Had my client not hired a qualified foreclosure surplus attorney, he might have lost everything or at least half of those surplus funds.

Bottom line is, there are a great number of factors that go into how much Florida Foreclosure Sale Surplus Funds (if any) will be available to if your property or that of a deceased loved one is sold at auction. It is my job to make sure that whatever that surplus is, you will receive the maximum amount you have coming to you. While I cannot control how much your property sells for at auction or how much the initial surplus funds are, I am able to potentially maximize your surplus funds based on your individual circumstances. If your property has been sold at a foreclosure sale auction and you believe you may have surplus funds, please give me a call for a free consultation. I am happy to give you a free consultation. I handle foreclosure surplus cases in every County in the State of Florida, and I don’t get paid unless you do.

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