Your Lender Could Owe You Money after Foreclosure

 Posted on August 19, 2019 in Foreclosure

If you are facing the possibility of foreclosure, you probably have many concerns. You are likely to be worried about the details of the foreclosure process in addition to more personal considerations such as where you are going to live and how you will repair your credit in the years to come. It is not unusual for homeowners in foreclosure to believe that they will be lucky to get through the proceedings without owing anything additional on their home. Depending on the circumstances of your situation, however, your lender might actually owe you money when everything is all said and done.

Balancing the Numbers

As a homeowner, you probably know that foreclosure is the process that a lender will use to reclaim your home if you fail to make your agreed-upon payments. During foreclosure, you will be given notice to vacate the property, and the home will be sold at a sheriff’s auction. The proceeds of the sale are then used by the lender to satisfy the remaining balance of the mortgage loan. What happens next will depend on the situation.

If you currently owe more on your mortgage than what your home is worth, the proceeds of the sheriff’s sale are unlikely to be enough to cover the full remaining balance. The amount remaining after the proceeds of the sale are applied is called a deficiency. Unless you have negotiated with the lender in advance, you will almost certainly be responsible for paying off the deficiency amount.

However, if the proceeds of the sale of your home exceed the remaining balance on your mortgage, you may be owed a refund. There might be fees, such as court costs and other considerations, that will be taken from the proceeds of the sale as well, but once those are paid, you are entitled to whatever is left. The remaining amount is known as an “overage,” and many experts believe that overages are among the best-kept secrets in the foreclosure industry.

Getting Your Money

It is important to discuss this possibility with your lender during the foreclosure process. In some cases, the lender might refund you directly. In others, the lender might only claim what it needs to satisfy your debt from the sheriff’s department that oversaw the sale. This means that your money could be waiting for you at your county sheriff’s office. A qualified foreclosure attorney can help you claim your refund so that you can work on moving forward with your life.

Call a Lake County Foreclosure Defense Attorney

Even if you believe that there is no way for you to avoid foreclosure, an experienced Libertyville foreclosure lawyer can help you protect your rights throughout the process. Call 847-549-0000 to schedule a free phone consultation with a member of the team at Newland & Newland, L.L.P. today to discuss your situation.

Sources:

http://www.gatehousenews.com/foreclosedandfleeced/

https://www.dummies.com/education/law/how-the-proceeds-of-a-foreclosure-sale-are-distributed/