When a property is sold due to financial difficulties, such as a foreclosure or a tax lien, homeowners may be entitled to receive excess funds from the sale. However, many people are unaware of the key distinctions between foreclosure overages and tax overages. While both involve surplus funds, they arise from different circumstances and have unique claim processes. Understanding these differences can help you recover what is rightfully yours.
What Are Foreclosure Overages?
Foreclosure overages, also known as surplus funds, occur when a property is sold in a foreclosure auction for more than the amount owed on the mortgage. When the sale price exceeds the outstanding mortgage balance and related fees, the difference—known as an overage—is owed to the former homeowner.
For example, if your home sells for $200,000 in a foreclosure auction, but your outstanding mortgage balance is only $150,000, there would be a $50,000 overage. This excess amount belongs to you, not the lender.
What Are Tax Overages?
Tax overages arise when a property is sold at a tax sale due to unpaid property taxes. If the sale price at a tax auction exceeds the amount of back taxes and related costs, the surplus amount—known as a tax overage—belongs to the former homeowner.
For instance, if a property is sold at a tax sale for $120,000 to recover $80,000 in unpaid taxes and penalties, there would be a $40,000 tax overage. Similar to foreclosure overages, this surplus amount is due to the previous owner, not the tax authority.
What’s the Difference Between the Two?
While both foreclosure and tax overages involve surplus funds from the sale of a property, the key differences lie in the circumstances of the sale and the legal process:
Source of the Sale:
Foreclosure Overages are generated from the sale of a property due to mortgage default.
Tax Overages result from the sale of a property due to unpaid property taxes.
Authority Involved:
Foreclosure sales are typically handled by mortgage lenders or banks.
Tax sales are conducted by local or state tax authorities.
Claim Process:
While both types of overages require a claim to be filed, the legal procedures and requirements may differ significantly between mortgage overages and tax overages. Understanding state-specific regulations is essential.
How Surplus Refund LLC Can Help
Navigating the complexities of foreclosure and tax overages can be overwhelming. That’s where Surplus Refund LLC steps in. Our experienced team specializes in helping homeowners reclaim the funds they’re entitled to, whether from foreclosure or tax sales. We work to ensure that the correct procedures are followed and that you receive the maximum amount owed to you.
Don’t Leave Money on the Table
If you’ve lost a property to foreclosure or a tax sale, you could be owed surplus funds. Contact Surplus Refund LLC today to learn more about your rights and how we can help you recover what’s yours.
Comments