Excess Proceeds: Equity You Are Entitled to Receive
At Provident Law®, an experienced real estate lawyer can help you recover excess proceeds from real estate sold as a result of a foreclosure. You may be entitled to recover excess proceeds from the sale as an owner, heir, or interested third parties, such as junior or secondary lienholders and involuntary creditors. For instance, the bank that holds the first mortgage on a home might be the primary lienholder who files the foreclosure action. The bank that holds the second mortgage on the property is a junior lienholder. Finally, an involuntary creditor might be a credit card company that has sued the homeowner, obtained a judgment against him for an unpaid debt, and then recorded the judgment as a lien against the home.
What Are Excess Proceeds?
After a creditor forecloses on a property, the foreclosed property is sold by auction at a trustee’s sale. In many cases, the property will sell for more than the amount of the debt. After the trustee uses the funds from the sale of the property to satisfy the primary lienholder and any other creditors of record, the trustee deposits the remaining funds with the county treasurer as “excess proceeds.”
Who Can Recover Excess Proceeds?
The priority of persons or entities entitled to receive payment of any excess proceeds is set forth by A.R.S. §33-812. Arizona law also provides for certain notice requirements when claiming excess proceeds. The court usually will schedule a hearing on any claims for excess proceeds to determine their appropriate distribution. Once the court issues an order on the distribution of funds, the party entitled to claim the excess proceeds can obtain them from the county treasurer.
How Do I Know if I Have an Interest in Excess Proceeds?
The county treasurer publishes a list online of all excess proceeds, including the name of the trustor, deposit date, case number, the amount of excess proceeds, and the current balance of the excess proceeds.
Do I Need an Attorney to Claim Excess Proceeds?
While you are not required to have an attorney to claim excess proceeds, you must closely follow the procedures under Arizona law for successfully obtaining excess proceeds after foreclosure. Failing to follow the strict process required by law could prevent you from obtaining the excess funds that you are entitled to receive — even completing the application for the release of excess proceeds of the sale can be extremely confusing.
Is There a Time Limit for Claiming Excess Proceeds?
Yes. Timing is very important. If you wait, you could lose your claim to the funds. Arizona law requires excess proceeds to remain on deposit with the county treasurer awaiting any claims for at least two years. If no one files a claim to the excess proceeds within two years, the county will presume the money to be abandoned. At that point, the county will go through the process necessary to turn over the excess proceeds to the state as unclaimed property.
Likewise, if you receive notice of a lawsuit concerning a claim to excess proceeds, there are strict time limits in which you must respond to protect any interest in those proceeds. If you don’t respond, you risk losing any claim that you have to the excess proceeds.
Are You Entitled to Excess Proceeds? We Can Help You
Our law firm can help you recover any excess proceeds you may be entitled to receive. Accordingly, we encourage you to contact us to learn whether you have a valid claim for excess proceeds and, if so, how you can collect them.
Provident Law® is a full-service real estate law firm. Two of our attorneys, Christopher J. Charles and J. Scott Burns, are Certified Real Estate Experts with the State Bar of Arizona. Whether you are involved in purchasing, selling, leasing, or developing real estate, we have the experience you need to ensure that your interests are protected throughout the process, including collecting any excess proceeds.
Reach out to Provident Law® today by calling our office at (480) 388-3343 or filling out the form on our contact page. An experienced real estate attorney is ready to talk with you about your legal issue and explain how we can help.