How to claim foreclosure surplus funds in California

How to claim surplus funds in California

1. The trustee holds the money

   At the trustee sale

   The trustee who ran the sale pays out the money in this order: sale costs and trustee fees, the loan that was foreclosed, junior liens in order of priority, and then you or your successor. A second mortgage or other junior lien is paid before you.

   Cal. Civ. Code § 2924k(a)

2. Watch for the surplus notice

   Within 30 days after the trustee's deed

   If there is money left after the sale costs and the foreclosed loan, the trustee must mail a notice within 30 days of signing the trustee's deed to everyone with a recorded interest who was entitled to the foreclosure notices. It tells you that you may have a claim and where to send it.

   Cal. Civ. Code § 2924j(a)

3. Send a written claim

   Received within 30 days after the notice is sent

   Send the trustee a written claim signed under penalty of perjury, at the address in the notice. The trustee must receive it no later than 30 days after the date the trustee sent the notice. The trustee may deduct a fee for handling the payout, and a fee of $100, or $125 when junior liens are paid, is presumed reasonable.

   Cal. Civ. Code §§ 2924j(a), 2924k(b)

4. Payment or a court deposit

   30 to 130 days after the notice period

   If no one disputes the claims, the trustee pays within 30 days after the claim period ends. If the trustee cannot sort out who comes first within 90 days, it deposits the money with the superior court clerk within 10 more days and mails a notice giving you 30 days to file your claim with the court. The court then holds a hearing and pays the people entitled to it.

   Cal. Civ. Code § 2924j(b) to (d)

5. If no one claims it

   A trustee holding surplus that was not deposited with a court must follow California's Unclaimed Property Law, so the money can end up with the State Controller. You can search and claim it from the Controller yourself for free. An agreement to pay someone to recover property the Controller holds is invalid if it charges more than 10 percent or requires payment before your claim is approved and paid.

   Cal. Civ. Code § 2924j(g); Cal. Code Civ. Proc. § 1582

6. Beware of surplus recovery offers

   No contact for 90 days after the deed is recorded

   No one may contact or solicit you to claim your surplus until 90 days after the trustee's deed is recorded. A foreclosure consultant may never arrange the release of your surplus for a fee, and only your own attorney is exempt. Do not sign over your claim; you can file it yourself.

   Cal. Civ. Code §§ 2924.21, 2945.1(c), 2945.4(h)

7. Surplus after a property tax sale

   Within 1 year after the tax deed

   Money left over after a county tax sale follows a different process: you file a claim with the county, not a trustee, within one year after the tax deed is recorded. See our California property tax foreclosure page for the steps.

   Cal. Rev. & Tax. Code § 4675

What California law says about leftover sale money

Common questions in California