I have read in articles recently that as much as 95% of homeowners (nationwide) don’t know they might have Surplus Funds left after a foreclosure or tax deed sale of their property. I can only speculate that part of the reason for this is because after their home was foreclosed on, they had to move and didn’t notify the clerk of court of their new address. This creates millions of dollars in unclaimed funds held by the various County Clerk of Courts throughout the state of Florida, and even more held by the Unclaimed Property Department of the Florida Department of Financial Services.
By people leaving these Florida Foreclosure Sale Surplus Funds sitting with the Clerk of Court, it makes that money ripe for fraud. The types of fraud are quite abundant. These could be a third-party purchaser requesting (and getting) the surplus funds from the court; one party getting all of the surplus funds from the court when more than one party is due them; and it could also be a third-party surplus recovery company naming someone who is not related to a deceased owner to get access to the surplus funds or tricks someone into signing over their rights to the surplus funds for small fees in return. Lastly, sometimes there are cases when a party fakes the documents necessary to obtain the Florida Foreclosure Surplus Funds from the court. I will go over a few prime examples, some of these I have witnessed myself.
Earlier this week, I was in a hearing with the court in a South Florida County. There were lots of cases to be heard. While I was waiting my turn for my hearing, one case came up with an attorney who represented a third-party purchaser requesting a portion of the Surplus Funds from a foreclosure sale to pay off past due assessments. My first instinct was to blurt out, “wait your honor! They aren’t allowed any of those funds!” Unfortunately, I couldn’t say anything because it was not my case. Florida Statute 45.032 is quite clear and states that “there is established a rebuttable legal presumption that the owner of record on the date of the filing of the lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” A third-party purchaser (someone who bought the property at the foreclosure auction) is nether the owner of record when the lis pendens was filed, nor a subordinate lienholder. They cannot make a claim. Furthermore, a Florida Third District Court of Appeals case, Pineda v. Wells Fargo Bank, stated, “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.” However, the judge obviously didn’t know the law and no other parties to the case showed to refute the claim and their motion was granted. This is extremely frustrating because it is a fraud on the Court and against the former owners of the property.
Next, I have seen cases where a newly divorced couple lost their property to foreclosure and there were Florida Foreclosure Surplus Funds available. One of the former spouses then hires an attorney to obtain all of the surplus funds for them, but conveniently leaves the other former spouse out. This scenario is also done between siblings when a parent has died, and they are both supposed to receive the surplus funds. By only one party getting the surplus funds, they would have had to represent to the court they were the only person able to receive the funds. This is a blatant fraud on the court. I am currently in the middle of a case where I have filed a motion to have funds redeposited to the court because one party was left out.
Next, there have been cases where someone will fake affidavits and other documents in order to make the court believe someone is asking for the Florida Foreclosure Surplus Funds. There was a case not too long ago of a couple of attorneys in South Florida who did this working with a surplus recovery company and got caught. They received hundreds of thousands of dollars fraudulently. Some of the parties are now in jail and at least one of the attorneys has been suspended from the practice of law in Florida indefinitely.
Lastly, I want to caution again against using a third-party surplus recovery company. Let me give you some examples as to why. There have been cases where one of these companies will ask you to sign over your rights to the property or to the surplus funds for a fee. They will give you a couple of thousand dollars and you sign over your rights to them before the foreclosure sale happens. Then when the foreclosure sale occurs, there may be Florida Foreclosure Surplus Funds in the tens of thousands that you no longer get, they do. Another tactic is to call you right after the sale (sometimes minutes after the sale) to get you to sign over your rights to the surplus funds requesting a small contingency fee (percentage) for helping you. They don’t tell you how much the surplus is. Then they also charge a really high consultation fee on top of everything, and it all totals up to be nearly half (sometimes more) of what you are owed. The biggest problem I have with this, is they are supposed to disclose to the court ALL of their fees, but very rarely do.
If you believe you may have Florida Foreclosure Surplus Funds coming to you, I caution you to please contact a competent Foreclosure Surplus and Tax Deed Surplus Attorney so you can protect your rights. With me representing the you in any of the aforementioned types of cases, I can save you a great deal of money. I have the knowledge, skill, and ethics to property handle these types of case and I am here to help you. If you or a deceased member of your family have lost your property to foreclosure sale and you believe there are Florida Foreclosure Surplus Funds or Tax Deed Surplus Funds available, please give me a call for a free consultation. I handle Foreclosure Surplus Funds and Tax Deed Surplus Funds cases in every County in the State of Florida, and I don’t get paid unless you do.