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Florida Foreclosure Surplus Funds Explained

In the state of Florida, when a property is sold at foreclosure auction there is always a chance that there is what is known as surplus funds available after the auction is complete. Surplus funds are defined by Fla. Statute 45.032(1)(c) as “the funds remaining after payment of all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements.” Florida Statute 45.032(2) further sets out 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 after payment of subordinate lienholders who have timely filed a claim.” Thus, meaning that the former Homeowner of record, or Titleholder, for the subject property at the time the foreclosure action was originally initiated is the one entitled to a portion, or the entirety, of the funds that are available depending on whether there are subordinate lienholders involved in the action.

For example: If a Final Judgment is entered in a Florida foreclosure action in the amount of $100,000 and the property sells at a foreclosure auction for $150,000, then there will be a surplus of funds in the amount of $50,000 retained by the Clerk of Court! As previously stated, the former Homeowner is entitled to a portion, or the entirety, of the surplus funds that are available.

Now that you know what surplus funds are, you may be wondering how they come to be. Florida foreclosure surplus funds are the direct result of Third-Party Bidders, or purchasers, competing at a Florida foreclosure auction to purchase a property. Due to the Third-Party Bidders competing to purchase a specific property this can often result in them bidding over the final judgment amount that was entered in the subsequent foreclosure action (please see above example). Therefore, due to the bid going over the final judgment amount a surplus is then retained by the Clerk of Court. Please note that all foreclosure auctions are public auctions — as such, they can be viewed by anybody at any time. Due to the public nature of foreclosure auctions, there are what are known as Third-Party Foreclosure Surplus Funds Recovery Companies lurking each counties foreclosure auction to uncover cases where surplus funds might be available.

As soon as the foreclosure auctions conclude these third-party companies will begin looking for auctions where surplus funds are available and once located, will begin relentlessly calling the former Homeowners to advise them of the same and to get them to hire their company to recover the surplus funds on their behalf. If you are a former Homeowner and are contacted by one of these companies, then I strongly recommend that you consult with an experienced Florida Foreclosure Surplus Funds Recovery Attorney right away so they can advise you of your rights when it comes to Florida foreclosure surplus funds. Additionally, you should NEVER SIGN anything that is received from a Third-Party Foreclosure Surplus Funds Recovery Company until after you have spoken with an experienced attorney.

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 whether there are surplus funds available for you to recover, 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 recovered as well as answer any questions that you may have. If there are surplus funds to be recovered, then I will also provide you with a personalized strategy as to how we can assist you with the recovery of YOUR Florida foreclosure surplus funds.

At Haynes Law Group, P.A., we have experienced Attorneys who are well-versed in the Florida statutes governing Florida homeowners’ claims to Florida foreclosure surplus funds and have helped to recover 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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