Foreclosure action surplus monies form 2025

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Several factors can influence whether foreclosure surplus funds are taxed. These include the initial purchase price of the property, any capital gains, and the length of time the owner held the property. The tax liability may be reduced if the property qualifies as a primary residence under certain conditions.
If your home is foreclosed in California, you may or may not still owe money, depending on the type of foreclosure and loan you had. In most cases, if your home is sold in a nonjudicial foreclosure (the most common type), you are not responsible for any remaining debt.
The former owner will have to petition the county to turn over the surplus funds. If no one petitions to recover them, the surplus funds generally can be held by the county for two years before they are distributed to the taxing bodies that foreclosed on the property.
Surplus funds usually get distributed first to subordinate lienholders in order of priority and then to the former homeowners (borrowers). So, you might have the right to claim the surplus funds after your house is foreclosed, particularly if you dont have any other liens on your home.
The rule says the first notice or first filing under a states foreclosure law cant occur until youre more than 120 days delinquent. Your delinquency begins on the first day your mortgage payment is due and not paid.
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People also ask

If the house is worth $300k and you owe $100k and suddenly cant make payments and get foreclosed, the bank just wants their $100k. If it sells for more than $100k, you get the difference. But if it sells for less than $300k then, yeah, you lost out on some equity.
When the house is sold after foreclosure (either through auction or other sale method) they will take the amount it was sold for and subtract everything you owe. if there is any balance left you will get that back. The bank however is not under any obligation to sell the property to make sure you get money back.

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