How to Claim Surplus Funds After Foreclosure

1. What Are Surplus Funds?

After a foreclosure sale, the proceeds first go to pay:

1. The trustee’s fees and sale costs
2. The foreclosing lender’s balance
3. Any junior lienholders (like HELOCs or judgments)

If money remains after all these debts are paid, that remainder is called “surplus funds”—and it belongs to you, the former homeowner (Cal. Civ. Code § 2924k(a)(4)).

2. How to Find Out If You’re Owed Money

After the sale, the trustee handling the foreclosure must notify all interested parties if surplus funds exist. You can confirm by:

• Calling the trustee listed on the Notice of Trustee’s Sale
• Checking with the county recorder’s office for the Trustee’s Deed Upon Sale
• Looking up your case on propertyradar.com or the trustee’s website

The trustee must hold the surplus funds for at least 30 days before turning them over to the court or rightful claimant.

3. How to Claim the Surplus

If surplus funds exist, follow these steps:

1. Request a Claim for Surplus Funds form from the trustee or county court.
2. Submit proof of ownership (deed, ID, or foreclosure documents).
3. Include your forwarding address, contact info, and bank account details for payment.
4. File your claim within the statutory deadline (often within one year of the sale).

Once verified, the trustee or court will issue a check for the remaining amount.

4. Beware of “Fund Recovery” Scams

Scammers often contact former homeowners claiming they can “help” recover surplus funds—for a hefty fee. Under Cal. Civ. Code § 2945.4, it’s illegal for anyone to charge more than 10% of recovered funds, and they must have a written contract. Never sign over rights to your surplus or share personal banking information with strangers. Always verify through official channels.

5. If There’s a Dispute

If multiple parties (like ex-spouses or creditors) claim the surplus, the trustee may deposit the funds with the county superior court under Cal. Civ. Code § 2924j. You’ll receive notice of the deposit and can file a petition to release funds by proving ownership or priority of claim. Even after foreclosure, you may still have money on the table. California law ensures that surplus funds return to the rightful homeowner—if you know how to claim them.