If your Florida home was sold at a foreclosure auction for more than the total amount owed on the mortgage — including principal, interest, attorney fees, and court costs — you may be entitled to the excess money. These are called surplus funds, and they belong to you (or to subordinate lienholders who had claims against the property). Florida law requires the clerk of court to hold these funds and notify parties who may be entitled to claim them.
Many former homeowners never claim their surplus funds because they do not know the money exists or do not understand the claim process. Do not leave money on the table. Here is exactly how to find out if surplus funds exist and how to claim them.
How Do Surplus Funds Occur?
Surplus funds occur when the winning bid at the foreclosure auction exceeds the total judgment amount. This typically happens when the property has significant equity — meaning it is worth more than what is owed on the mortgage.
For example, if the foreclosure judgment is $200,000 and a third-party bidder purchases the property at auction for $275,000, there is $75,000 in surplus funds. These funds are deposited with the clerk of court, not sent to the lender (who has already been made whole by the judgment amount).
Surplus funds do not occur when the lender is the winning bidder (buying the property back as REO), because the lender typically bids the judgment amount and no cash changes hands. Surplus funds only exist when a third-party buyer outbids the lender.
Who Is Entitled to Surplus Funds?
The distribution of surplus funds follows a priority system:
- Subordinate lienholders — any liens that were junior to the foreclosing mortgage (second mortgages, HELOCs, HOA liens, judgment liens) have first priority to the surplus funds up to the amount of their liens
- Former homeowner — after all subordinate liens are satisfied, the remaining surplus goes to the former homeowner (the person who owned the property at the time of foreclosure)
If there are multiple subordinate lienholders, they are paid in the order of their lien priority. Any amount remaining after all liens are satisfied belongs to the former homeowner.
Step-by-Step: How to Claim Surplus Funds
Follow these steps to claim surplus funds in Florida:
- Step 1: Verify surplus funds exist.Contact the clerk of court in the county where the foreclosure took place. Ask if surplus funds were deposited after the sale. You can also check the case file online through the county's court records system.
- Step 2: Review the clerk's notice. Under F.S. §45.032, the clerk must send notice to parties who may be entitled to surplus funds within 30 days of the sale. If you did not receive notice, contact the clerk directly.
- Step 3: File a claim or motion. File a written claim with the court asserting your right to the surplus funds. This typically includes a motion, supporting documents proving your ownership of the property, and identification.
- Step 4: Attend the hearing. The court will schedule a hearing to review all claims. If there are competing claims from subordinate lienholders, the court will determine the priority and distribution.
- Step 5: Receive your funds. After the court enters an order directing distribution, the clerk issues a check to the entitled parties.
How to Avoid Surplus Fund Scams
After a foreclosure sale with surplus funds, you may receive unsolicited letters, phone calls, or emails from companies offering to help you recover the money — for a hefty percentage. While some surplus fund recovery companies are legitimate, be cautious:
- Watch for excessive fees. Florida Statute §45.033 regulates the fees that surplus fund recovery services can charge. Some companies try to take 30% to 40% of the surplus for work that a local attorney could do for a fraction of the cost.
- Never sign over rights to your surplus. Some scammers ask you to assign your claim to them in exchange for an upfront payment that is far less than the actual surplus.
- You can claim the funds yourself. The process is not complicated, and the clerk of court can provide guidance on what paperwork to file.
What If You Lost Your Home and Had Equity?
Barrett Henry, a REALTOR with 23+ years of real estate experience and Broker Associate at REMAX Collective, emphasizes that the best way to capture your equity is to sell your home before foreclosure rather than relying on the surplus fund process. A pre-foreclosure sale gives you control over the sale price, avoids the uncertainty of the auction, and typically nets you more money than the surplus fund process.
If the foreclosure sale has already happened and you believe surplus funds exist, act quickly. Contact the clerk of court, verify the surplus amount, and file your claim promptly. If the amount is significant, hiring an attorney to handle the process is a worthwhile investment.
Think you may have surplus funds from a foreclosure? Contact us today for a free consultation. We can help you determine if funds exist and connect you with the right resources.