Let's say you owe $5,000 in property taxes or on your mortgage. If you fail to pay this amount, the lien holder can foreclose their lien. If the property sells for $100,000 at the foreclosure sale, the lien holder is entitled the total amount they are owed (in this case $5,000) and the remaining $95,000 is classified as "excess proceeds" from the foreclosure sale.
In a tax lien foreclosure, the excess proceeds (also known as surplus funds or surplus proceeds) are deposited with the court clerk. Potential claimants must then file a formal petition setting forth their claims to the excess proceeds. The court will then set a hearing to determine who is entitled to the funds. After proper notice to all necessary parties, the court will hear oral arguments and render a judgment as to who is entitled to the excess proceeds and to what extent (based on the priority of claims).If the owner of the excess proceeds fails to establish entitlement within the time period provided by the Texas Tax Code, the taxing units will share the excess proceeds in proportion to the amounts they were each owed.
In a normal foreclosure (i.e. by your mortage company), the excess proceeds are usually administered by the trustee or the foreclosure firm. Because of the potential liabilty to the trustee or foreclosure firm if they disburse the funds to the wrong party, they may want to involve the court by way of an interpleader action. This proceedure can take a substantial amount of time.
As a former foreclosure attorney, Dallas attorney Zac Copp is familar with the legalities and obstacles of this process and the strategies to get the excess proceeds in your hands as quickly as possible. We do not receive any compensation unless we recover the excess proceeds for you. If, and only if, we are successful in recovering your money, we charge a percentage of the amount collected on your behalf.
If you wish to talk to one of our excess proceeds attorneys, please contact us via email at firstname.lastname@example.org