A Quick Guide on How to Claim Foreclosure Overage and Excess Proceeds
Becoming a first-time homeowner is a common process in life’s journey for a lot of people. But so are hard times, and forclosure is a part of those hard times.
If you experience a foreclosure, you need to how to claim foreclosure overage.
A foreclosure happens when a borrower neglects the payments on a home loan. The process varies by state. But in general practice, the lender takes over the property and evicts the borrower.
After the eviction, the lender places the home up for sale to recoup their losses. In the state of Texas, this process resolves in about 60 days. That’s taking into consideration the timing of the state’s required notices.
The borrower can prolong the process by contesting the foreclosure in court.
If you’re interested in how to make money from foreclosure sales, check this out. Read this quick guide on how to claim foreclosure overage and excess proceeds.
How the Sale Works
As stated before, all states have their own process for how foreclosure sales work.
In general, an assigned officer of the court conducts the sale. That’s after the foreclosure gets classified as nonjudicial or judicial. This classification determines whether or not the foreclosure process goes to court.
In a nonjudicial foreclosure, a trustee or court-assigned officer works the process.
The home goes to auction, which may happen online or in person. Due to the advancement and ease of technology, most of today’s auctions happen online. The lender and third parties may bid on the home.
If the house sells for more than the loan balance, that amount is excess proceeds.
The average homeowner knows nothing about excess proceeds. When a home goes into foreclosure, they remove the belongings and move forward.
The trustee or officer of the court has a requirement to notify the borrower of excess proceeds. The problem with this is that when there are excess proceeds, the notice goes to the homeowner’s last address. That address is the foreclosed property.
In the majority of most foreclosure sales, the proceeds go unclaimed because the trustee can’t locate the borrower.
If your home goes through a foreclosure, leave a forwarding address and track the process.
How to Claim Foreclosure Overage
The lender has no claim to excess proceeds if a foreclosure sale ends in an overage. They can only recoup the amount of their losses—loan balance and associated costs.
If their aren’t any pending liens or judgments on the home, the borrower gets the overage. You have a right to claim the money.
If a borrower resides in the state of Texas, the law requires they file a petition for excess proceeds. They have a two-year window from the sale of the foreclosure to file and state a claim.
If the court doesn’t receive the petition within two years of the sale, the taxing entities keep the proceeds by default.
Follow the Process
Experiencing a foreclosure is a tough process. If you don’t know how it works you could miss out on how to claim foreclosure overage.
Follow the process. Find out what’s owed to you after your home gets sold and claim what due you.
Need help with your foreclosure situation? Speak with a qualified professional today and find out about your rights.