What are surplus funds?
 
After the lender (bank) or association receives a judgment in the foreclosure case and the real property is sold through a Foreclosure Sale, there could be funds remaining after payment of all disbursements as indicated on the Final Judgment of Foreclosure.
Those funds are called surplus funds. For example, there is a foreclosure judgment entered in the amount of $200,000. At the public auction, the real property sells for $225,000. This sale results in surplus funds amounting to $25,000.
 
Who is entitled to the surplus funds?
 
Section 45.032 of the Florida Statutes sets out who may be entitled to the surplus funds. The Owners of Record (meaning the person who owned the property at the beginning of the foreclosure lawsuit) and Subordinate Lienholders are entitled to surplus funds.
Therefore, the prior owner or borrower might be able to receive these funds even though they are no longer able to live in the home.

A subordinate lienholder is a holder of a subordinate lien. Examples of a subordinate lienholder could be a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien. Even if there are subordinate lienholders, there may be enough funds left over to pay the owner or defendant in the case.
 
What is the process to claim surplus funds?
 
Every case is different.  In some cases, filing the claim does not have to take place immediately. In other cases, however, filing the claim as soon as possible is crucial. Timing is everything; therefore, contact a real estate attorney who can review each case and determine if the claim should be filed sooner rather than later.
 
You must follow specific steps to claim the surplus funds. If you fail to follow those steps, then the surplus funds will be either abandoned or remain with the State of Florida.
 
If you are an owner or subordinate lienholder, please contact Kimberly M. Soto at 321.972.2279 so she can further ensure that you receive the funds that may be rightfully yours from the foreclosure sale.