If your home had equity when you were foreclosed upon, you could be owed a substantial amount of money — even if the foreclosure was in the past. We can help: (888) 529-3111
When a person buys a home using a mortgage, the bank typically expects the individual to repay the entire loan, plus interest, within a specified time-frame. Unfortunately, sometimes the borrower is unable to pay due to unforeseen difficulties. In the event of such a scenario, the bank repossesses the home and puts it up for sale, or a “foreclosure auction,” in order to recoup the remainder of the loan. If the lender sells the house for more than what was owed, the additional amount is referred to as surplus cash.
According to the California Civil Code § 2924j, if your home is sold by your custodian in a foreclosure auction for more cash than you were supposed to repay for the original loan, you have every right to claim the difference. In addition, the vital reason why you should ask for the surplus funds is because it is the advantage of obtaining your own equity.
In finance terms, equity refers to having ownership to the overall value benefit of what you own, or what may be accrued after any debts. If you had not received the mortgage and bought the house, its value would have remained the same due to the lack of demand. Given this reason, you are entitled to any additional benefits that may be accrued during the property’s foreclosure sale.
In the event you find that there were extra funds arising from the resale of the repossessed property and want to obtain these funds, you may first have to file a motion with the court. Since this type of motion is not available in pre-printed Judicial Council format, your attorney has to draft one from scratch. The document may contain the following information:
In addition to the parts stated above, another document called a “proposed order” is created for the judge to sign. Such order document will highlight your motion’s demands to the judge.
Once your attorney has drafted the motion and proposed order, he or she will make four copies of each document, before serving one copy to the lender and signing the Proof of Service form. The remaining three copies plus the originals are filed with the court.
On the day before the actual hearing, the court will make a tentative ruling to determine whether they have granted or denied the motion. If the judge refuses your motion, it would be advisable to call the opposing counsel and the court clerk on the same day before 4 pm to request an oral argument against the tentative decision. However, if your motion has been granted, you are on your way to getting your surplus cash.
Once the court orders the bank to pay you the surplus amount, you may then become the judgment creditor, while the lender, on the other hand, becomes the judgment debtor. Before making any rash decisions, it is essential to understand what the overall process entails.
After the court’s decision, the judgment debtor has thirty days to decide whether they will appeal, file a motion to vacate the judgment (in case they were absent during the hearing), mail you their statement of assets, or pay the full surplus.
Once this grace period is over, you can contact the judgment debtor and come to an agreement as to how to best handle the transaction. To avoid any arguments, it may be best that you write to the judgment debtor instead of calling them or seeing them in person at first. After the judgement debtor has acknowledged the letter, you both may make a compromise based on a payment plan either through a personal agreement, or by filling a Stipulation for Time Payments form, signing it, as well as filing it with the court.
If the judgment debtor is reluctant to pay, you may seize all that are listed under the statement of assets through a court order. In addition, you may also file another motion to compel in order to reveal any hidden assets. This is especially true if the current assets are unable to cover the full surplus amount.
Sometimes the surplus matter does not proceed to court since the trustee declares the excess proceeds to the mortgagor through first-class mail. In this case, the borrower may contact the lender and confirms his or her identity before stating their claim. The mortgagor is also required to present a sworn affidavit with the claimed amount to the trustee. Furthermore, if the lender confirms that the information is correct, they pay the claimant the excess equity within thirty days.
Though the claimant is intended to be compensated, if the trustee fails to confirm the true identity of the claimant, the trustee may deposit the surplus money with the clerk of the court, leaving the judge in charge of handling the case. Before the trustee gives the proceeds to the court, they have to inform all claimants through first-class mail. Once the money is deposited in the court’s bank account, the court takes full responsibility of the surplus disbursement.
Regardless of whether the trustee accepts to pay the excess equity or not, the process is lengthy. Given the strenuous time and effort needed to pursue the overall process, it is always advisable that you retain an experienced Surplus Funds attorney to efficiently carry out your case. Your knowledgeable surplus lawyer will assure that all bases are covered in the claim and prevent you from losing any more money. Such legal professionals may also contact the lender, or the clerk, on your behalf and follow up until the amount is paid to you in full. Without the diligent legal support of a trusted surplus funds law firm, you may not receive your desired outcome. Avoid any error or frustration and contact our firm now for any questions or concerns you may have regarding your surplus funds – we’re here to help.
Michael Avanesian primarily focuses in the field of corporate restructuring and litigation. Mr. Avanesian has a wide range of experience in Chapter 11 bankruptcy cases and has represented corporate and individual debtors, secured creditors, unsecured creditors, lessors, lessees, trustees and other interested parties in bankruptcy cases and related litigation.
Looking for trusted legal support?
Look no further – we can help.