Do I get money back if my Foreclosure home sells for more than what's owed?

How do I get my money back?

How to get money back with your foreclosure
Going through foreclosure can be a long, stressful, and emotionally draining process. Furthermore, it will impact your financial life in some ways.
While most people realize that nothing good comes from foreclosure, there may be something waiting for you at the end of the process: cash.
Generally speaking, if a buyer offers more than required to pay off the debt, the former owner is in a position to receive the excess funds. 

How Much?

When a lender repossesses your home, the bank will then begin the process of selling it to an interested buyer. This happens in one of two ways:
  • Via a foreclosure auction.
  • By listing the home with a real estate agent.
Either way, the lender will set a price that allows them to recoup the remaining balance of the loan.
For example, if you owe $200,000 on the mortgage, the bank will start the auction or list the home at this amount. 
With this in mind, it’s possible that a bidding war could drive the price up. So, instead of selling for $200,000, the home eventually sells for $250,000.
While this sounds like good news for the lender, nothing could be further from the truth; It’s good news for the person who previously owned the home.  
The bank does not have a legal right to keep the money more than what is due on the loan. They can take the full amount of the loan, plus costs and fees, but anything that is left over should go to the previous owner.

The Problem with this

When a person loses a home to foreclosure, it’s only natural for them to move on with their life. And in many cases, this means starting fresh without wanting anything to do with the past.
Unfortunately, this leads to the potential for a terrible mistake:
Neglecting to leave a forwarding address.
While it may sound like a good idea to leave your home in the past and move forward with your life, this can work against you if there is money owed after the foreclosure sale. 
Note: even if you don’t claim the money immediately following the sale, it’s possible for you to do so in the future. Foreclosure surpluses typically sit in fund pools managed by a local government or state, waiting for the past owner to claim the money. 

Be Active with Your Search

How can you find out if there’s money waiting for you after a foreclosure?
This relies heavily on where you live. Some states follow a non-judicial foreclosure process, while others have a judicial process in place.
Regardless, it’s important to note one thing: if you’re due any money, it’s out there waiting for you.
If you live in a judicial state, contact the court responsible for your foreclosure. From there, you can provide your case number to determine if there was a balance left over after the sale.
If you live in a non-judicial state, the process is a bit different, as you’ll need to contact the trustee for information regarding the sale, including any surplus funds.

It Could Happen

There is no way of knowing what will happen if you lose your home to foreclosure. It could sell for the exact remaining balance. It could also sell for more or less.
To ensure that you’re in the position to receive any funds that are due to you, leave a forwarding address with the lender. Also, don’t hesitate to check with the appropriate court or trustee once the sale is finalized.
Who knows, you may be surprised to find that you’re due some money.