It is widely recognized that one of the primary stresses in home-ownership is the monthly mortgage payment. In some cases, unexpected events can occur and cause financial problems that make it difficult or impossible to keep up with your payments. If you fall behind on your payments, your lender may initiate a foreclosure process against you and attempt to take possession of your home. If the foreclosure remains unresolved, the bank will ultimately attempt to recoup its losses by selling the property at a foreclosure auction.
At a foreclosure auction, each of property is assigned an initial minimum bid amount, and each bidder has the right to offer a higher amount than the previous bidder if they so choose. The bids are irrevocable promises to purchase the property, which is sold to the highest bidder as long as the bid is above the assigned initial minimum bid. Many of the sales that occur at auction are great deals for the end purchaser, but still result in a loss to the lender. However, in some cases the sale price will exceed the outstanding balance of the mortgage loan. The difference between the final sale price of the property and the outstanding balance on the mortgage loan is called a mortgage surplus.
It is extremely important to note that the Borrower retains the right to recoup part, or all of the mortgage surplus. However, you must act diligently and take action to recover any funds. In many cases, you only have 60 days to claim an interest in the surplus funds. Even if you feel your home is not worth what is owed, it is always a smart idea to do your due diligence and find out if there was a surplus from the sale of your home. If you are interested in making a claim for the surplus of funds call our office today for a free consultation.