What are Tax Sale Foreclosure Surplus Funds?
If your lender has obtained a Final Judgment in a Mortgage Foreclosure or a Tax Sale Foreclosure, they may attempt to sell your home at a Sheriff Sale. The money paid by the successful Bidder will be used to pay the total amount due for the Foreclosure and costs of the Sheriff Sale.
If the winning bid is more than the total amount owed, any money remaining is known as “Surplus Equity” or “Surplus Funds.”
Am I Entitled to The Surplus Funds?
If there are Surplus Funds after a Sheriff Sale, any other creditors with liens or judgments may apply for surplus funds. If there are no other liens or Judgments, or the other liens and judgments are less than the amount of Surplus Funds, the funds should belong to the property owner or their Heirs.
Example: A property owner owes $200,000 as a result of a foreclosure and sheriff sale. The property sells for $250,000 at a sheriff’s sale. $200,000 satisfies the total due, and the extra $50,000 are the “Surplus Funds.”
How Can I Claim Tax Sale Foreclosure Surplus Funds?
If your property has been sold at a sheriff sale and any surplus funds remain, the money will be deposited into the Superior Court Trust Fund. According to NJ Court Rules 4:64-3 and 4:57-2, any person who believes they are entitled to all or part of the surplus can file a motion with the court explaining why they are entitled to the money and asking for an order directing payment of the surplus funds.
The county sheriff who conducted the sale will have information regarding the surplus, if there is any.
If your property was sold at a Sheriff’s Sale and you have questions about obtaining Surplus Funds, contact the Law Office of Ira J. Metrick today.
