Key takeaways
- Surplus is what’s left after the loan, sale costs and other liens are paid from the sale price.
- Under Georgia law, remaining surplus is paid to the former owner (O.C.G.A. § 44-14-190).
- Start with the attorney who conducted the sale; funds may also be deposited with the superior court.
- You can usually claim it yourself. Be wary of companies that want a large percentage.
What are foreclosure surplus funds?
At a foreclosure auction, the property goes to the highest bidder. If the winning bid is more than the amount owed on the foreclosed loan plus the costs of the sale, the difference is surplus (also called excess proceeds or overage).
Who gets paid first
- The foreclosing lender’s debt and the costs of the sale.
- Junior liens, such as a second mortgage or HELOC, judgment liens and other recorded claims, in order of priority.
- Anything left goes to the former owner (O.C.G.A. § 44-14-190).
How to find out if there’s a surplus
- Contact the foreclosure attorney or trustee named in the sale notice and ask whether the sale produced excess funds and where they are.
- Check with the clerk of superior court in the county where the home is. When there are competing claims, the funds may be deposited with the court in an interpleader case.
- Gather proof that you were the owner, a photo ID, and the sale date and property address.
Be careful with “surplus recovery” companies
After a foreclosure, former owners often get letters offering to recover their money for a large share of it. Some are legitimate, but you can often make the claim yourself or with an attorney for far less. Never sign an assignment of your rights without understanding exactly what you’d receive.
Tax sales are different
Excess funds from a property tax sale follow separate rules (O.C.G.A. § 48-4-5) and are handled by the county tax commissioner. This guide covers mortgage foreclosures.
Better: protect your equity before the sale
Auction bids are often well below market value, so surplus, if any, is usually much smaller than the equity you’d keep by selling the home yourself before the sale date. If you’re still before the sale, read how to sell your house in foreclosure.
This guide is general information for Georgia homeowners, not legal, tax or financial advice. Laws and lender practices change, and every situation is different. Talk with a HUD-approved housing counselor (800-569-4287) or a Georgia attorney about your circumstances.