What does a surplus fund available mean? After a foreclosed house got sold by 3rd party and paid off bank

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What does a surplus fund available mean? After a foreclosed house got sold by 3rd party and paid off bank

I would like to know what it means when a letter states that a sale price of the foreclosed house was sold for more than the amount paid on the mortgage dept and shows there is a surplus funds available to the defendents which are the Administrators, lawyer, IRS and state revenue dept?

Asked on March 22, 2019 under Real Estate Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

It actually means what it sounds like: there is a surplus of money because the house sold for more than was required to pay off the mortgage. That surplus is available first to pay certain high-priority (as defined by the law) debts, like to the IRS, state tax agency, and the administrators and lawyers who worked on the matter, all whom can put in and justify their claims. Anything left after that would go to the house's former owners.


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