Frequently Asked Questions

 Excess proceeds are funds generated from the sale of a foreclosed property that exceed the amount owed on the mortgage, including any fees, penalties, and interest. 

 Excess proceeds are calculated by subtracting the total amount owed on the mortgage, including fees, penalties, and interest, from the sale price of the foreclosed property 

The former homeowner, junior lienholders, and other parties with an interest in the foreclosed property may be entitled to claim the excess proceeds.

To claim excess proceeds, you will need to contact the entity responsible for distributing the funds, which is usually the county clerk or trustee. You may also need to provide proof of your interest in the property, such as a copy of the mortgage or lien. 

The timing of when you will receive the excess proceeds can vary depending on the state and the specific circumstances of the foreclosure. In some cases, it may take several months or even years to receive the funds.

 If no one claims the excess proceeds, they may revert back to the foreclosing entity, such as the bank or government agency, or they may be transferred to the state's unclaimed property fund.

No, the lender is not entitled to keep the excess proceeds. They must be distributed to the parties with a legal claim to the funds.

The amount of excess proceeds you will receive depends on a variety of factors, including the amount owed on the mortgage, the sale price of the property, and the number of other parties with a claim to the funds. 

Yes, in most cases, you will need to pay taxes on the excess proceeds. The amount of taxes owed will depend on your individual tax situation. Add an answer to this item.

If the excess proceeds are not enough to cover your debt, you may still be responsible for paying the remaining balance. You should consult with a financial advisor or attorney to understand your options. Add an answer to this item.

Yes, you may be able to sell your right to the excess proceeds to a third-party investor. However, you should be cautious when considering these types of transactions, as they can often come with high fees and interest rates. 

In some cases, you may be able to use the excess proceeds to buy back the foreclosed property. However, you should consult with a real estate attorney or financial advisor to understand your options. Add an answer to this item.

Yes, you can use the excess proceeds to pay off other debts. However, you should prioritize paying off any outstanding mortgage debt or other liens on the property first. Add an answer to this item.

If there are multiple parties entitled to the excess proceeds, the funds will typically be distributed in order of priority, with the former homeowner receiving the first portion. 

If the property was foreclosed by a government agency, such as the IRS or HUD, the process for claiming excess proceeds may be different. You should consult with a real estate attorney or financial advisor to understand your options in this situation. Add an answer to this item.