Posted by CL2 on September 26, 2003 at 16:10:14:
Oh ok. Thanks for clearing that up.
Excess proceeds from forclosed property ? - Posted by Foreclosure Question
Posted by Foreclosure Question on September 26, 2003 at 11:12:01:
Hello Everyone,
I am confused about something, and perhaps you know the answer. A house is foreclosed upon. Entire mortgage balance due at time of foreclosure is $170,000. But surprise surprise, the house sells for $192,000 at the foreclosure auction. Is the foreclosed owner entitled to the excess proceeds (that is minus the sheriff fees, legal fees etc). Is the owner of a foreclosed property entitled to the excess proceeds, where the foreclosed property is sold for much more that the total mortgage due ? I am in NY. Please help.
Re: Excess proceeds from forclosed property ? - Posted by Marcos
Posted by Marcos on September 26, 2003 at 15:04:42:
This only applies to Judicial Foreclosure states, I have no idea what happens in Non-Judicial states.
In many states the homeowner does not automatically receive any excess funds. I can only speak from experience in Florida, my knowledge is limited in most other states. It’s not like the sale happens on Friday, and they cut you a check on Monday. You have to petition the court for those funds.
Let me explain in two different scenarios.
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First is foreclosing, they get a judgement for $71k. The property goes to sale and sells for $85k. The first gets $71k plus a few hundred bucks for advertising the sale and interest between judgement and sale. I bought the second on this property. The principal value of the second is $25k. I record my assignment, my attorney petitions the court for the excess funds, and about 30 days later I get the excess funds from the sale.
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Property I was trying to get as it was getting closer to sale. I FINALLY got the quitclaim the week before the sale. But, I didn’t have enough time to stop the sale. Three months of work down the drain. WAIT! Not quite. First has a judgement for $41k, home sells for $48k at the sale. I record my quitclaim, and the attorney petitions for the excess funds.
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Hypothetical situation. First is $40k, second is $20k, home sells at foreclosure sale for $75k. Theoretically the first should get their $40k, second $20k, and the homeowner $15k.
The point is you must petition the courts for the excess. I have heard that there are many millions of dollars sitting in most counties coffers waiting for someone to pick those funds up. Makes you think, huh?
HTH,
Marcos
It Happens. - Posted by Randy
Posted by Randy on September 26, 2003 at 11:57:37:
Yes the foreclosed property owner receives the excess. It is rare this occurs, unless the foreclosed property owner or some one else bids more than the underlying liens, (Probably a inexperienced buyer or someone who just wanted the property for emotional reasons). But it happens?
yes - Posted by ken in sc
Posted by ken in sc on September 26, 2003 at 11:28:12:
I am not in New York, but once I bought a house at the sale and that is exactly what happened. The “seller”, also known as the person being foreclosed on, received the excess funds.
Ken
Exactly right… Many, many millions (nt) - Posted by JT-IN
Posted by JT-IN on September 29, 2003 at 18:31:37:
$
Re: yes - Posted by CL2
Posted by CL2 on September 26, 2003 at 11:50:43:
I thought that once the home is foreclosed on and auctioned at the courthouse steps that essentially the bank now owns the property and the person who let it go into foreclosure is just out of luck?
Re: yes - Posted by Bill H
Posted by Bill H on September 26, 2003 at 15:19:33:
The bank does not own the property until AFTER the sale and only then if they are the successful bidder. Until that time it belongs to the owner being foreclosed on.
Good Luck,
Bill H