NJ Foreclosure: Am I Entitled to Mortgage Surplus Funds?

mortgage surplus

Most people view foreclosure as the end of a long battle to keep their home. While it may feel as though you are losing everything, there is still a chance you could get something out of the process. Foreclosure can be a very frustrating experience, but there is a potential for you to receive some funds from the sale of your home to help ease the burden of losing your residence. The monies homeowners can be entitled to after the sale of their home at auction are known as mortgage foreclosure surplus funds. Here, we take a look at who is entitled to mortgage surplus funds.

Once your lender has obtained a final judgement of foreclosure, they will begin trying to sell your home in a sheriff sale in order to make up for the money you owe on your mortgage and any expected costs or fees that have accrued. A sheriff sale typically occurs in the form of an auction. The lender can start the bidding at any amount up to the total amount owed to pay off the debt. However, if multiple buyers are interested in the property, a bidding war can jack up the ultimate sales price. If the buyer ends up paying more for the house than the total amount the owed by the original homeowner, there is a mortgage surplus. Alternatively, if the home sells for less than the borrower owed on the house, the remaining balance is a deficiency. While the lender can file a separate lawsuit to recuperate these funds, it is not a common practice to do so in New Jersey.

Am I entitled to any mortgage surplus funds?

You are likely entitled to surplus funds if: 1) your home was sold in foreclosure for more than you owed the lender, 2) you had equity in your home before foreclosure, or 3) you received a letter from the foreclosure trustee notifying you of surplus funds. It is important to note that any other creditors with liens or judgements on the property may also be eligible to receive surplus funds. If these other creditors do not make application or if there are no other creditors connected with the property, the funds will go to the homeowner.

After your home has been sold and the lender has received payment for the amount owed in the final judgement of foreclosure, the excess money will be deposited into the Superior Court Trust Fund. The lender is not entitled to any funds exceeding what was described in the final judgement, including taxes or insurance costs accrued after the fact. In the event that there is a surplus, the County Sheriff who oversaw the sale will be able to provide information concerning how to receive payment. The former homeowner can file a motion with the court explaining why they are entitled to these funds. If the court approves this motion, an order directing payment of the surplus funds to the former homeowner will be issued.

If you think you are entitled to mortgage surplus funds, Veitengruber Law can help. We are highly experienced in the New Jersey foreclosure process and are proud of just how many NJ homeowners we have helped to the other side of losing their home. We can help you recover a surplus from your foreclosed property. Additionally, we can help you navigate the legal process and handle complex paperwork so you can get your money back faster. We understand the stress and anxiety going through foreclosure can have on our clients. Our goal is to ensure the recovery of any monies due so your brighter financial future can start sooner!