Excess proceeds (surplus funds)

Money left after a foreclosure or tax sale pays the debt and costs; it goes to junior lienholders and then the former owner.

Excess proceeds, also called surplus funds, are what's left when a foreclosure or tax sale brings in more than the debt, interest and costs. That money doesn't go to the lender. It goes to junior lienholders in order of priority, and then to the former owner. Each state has its own claim process:

• California trustee's sales: within 30 days after signing the trustee's deed, the trustee mails notice to everyone with a recorded interest, and claims are due 30 days after that notice. If the trustee can't sort out who's owed what, it can deposit the money with the court. California guide
• California tax sales: claims are due within one year after the tax deed to the buyer is recorded.
• Florida foreclosure sales: junior lienholders who claim in time come first; after that, the owner of record on the day the lis pendens was filed is presumed entitled. Surplus still unclaimed a year after the sale goes to the state's unclaimed property program. Florida guide
• Florida tax deed sales: the clerk mails notice, and claims are due within 120 days of it.
• Texas tax sales: the excess goes into the court's registry, and a claim has to be filed within two years of the sale. Texas guide

A word of caution: people who offer to recover surplus for a fee are regulated. In California, recovering surplus for pay generally counts as foreclosure consulting under Civil Code section 2945, with strict rules on fees and contracts.

All glossary terms

General information, not legal advice. For your own situation, talk to a lawyer.