Surplus Funds Recovery Lawyer Serving Los Angeles County and Orange County

A California trustee’s sale is a cash auction. When the winning bid is larger than what the foreclosing lender was owed, the trustee ends up holding money that no longer belongs to the lender, and the Civil Code says who receives it. Surplus funds recovery is the work of proving that you are that person and getting the money released. Fred Yadegar does this for former homeowners, heirs, and lienholders whose properties were sold in Los Angeles County and Orange County.

Where the money is sitting right now

There are only three places it can be. In the weeks after the sale the trustee holds it. Once the trustee’s deed has been executed, the trustee has 30 days to send written notice of the surplus to each party holding a recorded interest (Civ. Code §2924j). If the claims conflict or their priority is unclear, the trustee deposits the funds with the clerk of the superior court for the county of sale, together with a declaration listing the competing claims, and a second notice goes out. Money that nobody claims can eventually be transferred to the county or to the state’s unclaimed property program. Each stage adds a form and a wait, so delay only lengthens the process.

Who is paid before the former owner

Civil Code §2924k sets the order, and it does not begin with you. The trustee first pays the costs and expenses of the sale, then the loan that foreclosed, then every junior lien in order of priority. The former owner, or whoever succeeded to the former owner’s interest, comes last.

Suppose the foreclosing lender was owed $268,000 with costs and the property sold for $355,000. The trustee holds $87,000. If a home equity line with a $31,000 balance was recorded behind the first loan, that lender is paid next, and $56,000 remains for the former owner. With no junior liens, the full $87,000 does.

Proving the claim

A former owner’s claim rests on title and identity: the recorded grant deed showing that you held title when the sale occurred, and government identification showing that you are the person named on it. If the owner has died, the estate claims through a representative with authority under the Probate Code. Lienholders prove the recorded lien and the balance due. We assemble every claim from the county record, so the trustee has no reason to set it aside.

Seven problems, one office

This practice covers the questions that surround a surplus claim:

• Overage and surplus funds recovery, the claim, priority contests, and court deposits
• Post foreclosure assistance, the eviction summons, cash for keys, and surviving debts
• Real estate, stale liens, co-owner disputes, association ledgers, and quiet title
• Probate for properties without a will or trust, authority for an estate to collect
• Trustee sale, reading the notices and the deed
• Wrongful foreclosure, when the sale broke the rules
• Heirship of a foreclosed estate, proving who inherits after a death

Excess proceeds from a county tax-defaulted property sale are also handled, under different rules: the claim goes to the county, and the deadline is one year from the date the tax deed is recorded (Rev. & Tax. Code §4675).

A licensed attorney, not a recovery business

After a foreclosure, businesses write offering to recover money for a share of it. California treats those non-attorney operations as foreclosure consultants (Civ. Code §2945 et seq.) and exempts licensed attorneys, because the State Bar already regulates us. Fred Yadegar has been licensed in California since 2006, State Bar #244184, and files surplus claims from trustee’s sales throughout Los Angeles County and Orange County. There is no fee up front; our fee is paid from the funds recovered, only when there is a recovery, through a client trust account with a written accounting.