Detailed Answer
When a foreclosure sale yields surplus funds above the outstanding mortgage debt and related costs, Massachusetts law allows the former mortgagor and other lien holders to seek that surplus. The process typically involves the following steps:
- Identify the surplus and deadline. After a foreclosure under power of sale, the purchaser must deposit any excess funds under M.G.L. c. 244, § 14. The clerk acknowledges the report of sale in court. Claimants have three months from that acknowledgment to file a petition under M.G.L. c. 244, § 15. Missing this deadline may bar recovery.
- Prepare and file the petition. File your petition in the county registry of the court where the property is located. The petition must be signed and sworn by you or your attorney. Include your name, address, a description of your claim, the amount you seek, and the facts supporting your interest.
- Serve notice on interested parties. The court will schedule a hearing and order notice to the mortgagee, purchaser, and any other interested parties under M.G.L. c. 244, § 16. You must serve that notice as directed by the court order.
- Attend the court hearing. Present evidence such as payment records, lien documents, or title history. The court reviews all claims, resolves conflicts, and may require you to post a surety bond to secure payment.
- Record the order and bond. If the court approves your claim, it issues an order directing payment of the surplus. Record that order and any required surety bond in the registry of deeds for the county where the property lies.
- Claim the funds. After any appeal period expires (usually 30 days), the court clerk issues a check. Present the recorded order and bond to the registry of deeds or court clerk to obtain the surplus funds.
Helpful Hints
- Act before the three-month deadline to preserve your right.
- Obtain certified copies of the foreclosure docket and report of sale.
- Confirm the exact date of acknowledgment to calculate deadlines.
- Serve all interested parties according to the court’s instructions.
- Prepare clear evidence of your interest in the property.
- Be ready to post a surety bond if the court requires one.
- Monitor the court docket for the appeal period and fund release.
Disclaimer: This article provides general information and does not constitute legal advice. Consult a qualified attorney about your specific situation.