Determining if Surplus Funds Remain After a California Foreclosure Sale
Detailed Answer
When a property sells at a foreclosure auction for more than the outstanding debt, foreclosure costs, and trustee fees, the excess sale proceeds become surplus funds. In California, a nonjudicial trustee must distribute any surplus within 60 days under Civil Code §2924k(g). Judicial foreclosure sales require the court clerk to hold and pay surplus under Code of Civil Procedure §701.720.
Here’s how you can confirm whether surplus funds remain:
- Contact the Trustee or Court Clerk. For nonjudicial foreclosures, reach out to the trustee whose contact information appears on the Notice of Sale. Request a written accounting and documentation of any surplus funds. For judicial foreclosures, contact the court clerk in the county where the case was filed and ask if they hold surplus proceeds under CCP §701.720.
- Review Recorded Documents. Obtain a copy of the Trustee’s Deed Upon Sale from the County Recorder’s Office. The deed shows the sale price. Compare that figure to the original loan balance and foreclosure costs to estimate possible surplus.
- Check Public Records Online. Many California counties provide online access to foreclosure trustee sale reports and court dockets. Search by property address or case number to find sale results and any lodged surplus funds.
- Submit a Formal Claim. If you’re the trustor (original borrower) or a junior lienholder, prepare a written claim that includes proof of your interest (e.g., deed of trust, payoff statement, or judgment lien). Send it to the trustee or clerk before the statutory deadline—60 days for nonjudicial and typically 30 days for judicial sales.
- Monitor Distribution Deadlines. Nonjudicial trustees must distribute surplus within 60 days of sale under Civ. Code §2924k(g). Courts often require claims and payments within 30 days after confirming the sale.
Helpful Hints
- Gather all foreclosure documents (Notice of Sale, deed of trust, court papers).
- Act promptly—missed deadlines may forfeit your right to surplus funds.
- Verify junior lien priorities to determine if other creditors claim the surplus first.
- Use county recorder and court online portals for faster research.
- Keep detailed records of communications, claims, and receipts.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.