More about Surplus Funds
While anyone would be excited to learn that there is a pot of money
awaiting them to claim it, there are some things you should know
about the process.
1. It takes time. Prior to any petition being filed to claim the surplus, it is essential
to have a title search for the owner of the property (whether living or deceased).
The court requires a title opinion that shows there are no other potential claims
on the money. These claims could be judgment liens (credit card judgments, for example) or tax liens, or even an unpaid second mortgage or equity line of credit.
They should be paid first from the equity before distribution
to the prior owner or heirs.
2. If the funds are from a sale of property which belonged to a decedent - for example,
when heirs of someone who died did not continue to pay the mortgage, and it was foreclosed upon - there will have to be an Estate opened in order to distribute the money to the rightful heirs. This adds a layer of complexity and potentially expense as well.
3. My practice is to order a title search; I can analyze the results to see if there are claims which need to be paid from the funds. If there are many - for instance a second mortgage - which eat up the funds, it might not be worth pursuing. I can get a clearer idea after the title search.
4. If an Estate needs to be opened to distribute the funds to heirs, I have estate administration (a/k/a probate) experience and can do this comfortably.
I'd be happy to discuss this with you if you have received a notice of surplus funds.