In some situations, it makes sense to let your house go in foreclosure. The value of the house may be less than what you owe on it or it just might not be home anymore. However, when a lender pursues a foreclosure, there are times when the property sells at auction for more than what the court needs to pay out. Sometimes this is because a bidding war breaks out for the property and it sells for an inflated value. In other situations, a second mortgage holder may not have taken the appropriate actions to protects its rights in the auction proceeds.
If the second mortgage holder does not file an answer the foreclosure complaint, then the property will be sold at auction free and clear of the second mortgage. If there is money leftover after paying the first mortgage holder in full from the sheriff sale proceeds, the homeowner gets the rest of the money. This is true even if you still owe the second mortgage holder for the lien that they had on your house. This is true even if you did not file an answer in the foreclosure yourself. I recently had a client contact my office where it appears they will get over $80,000.00 back from the sale of the house at foreclosure sale.
If you are entitled to excess proceeds from the foreclosure auction of your house, the court will send you a notice. DO NOT IGNORE THIS NOTICE! You also will get advertisements and calls from a lot of attorneys that offer to get this money back for you...for a percentage of the proceeds due to you. I have heard of percentages of 45% being charged against these proceeds. This is highway robbery. My office can provide this service for you for a reasonable flat fee. If you cannot afford the flat fee up front, then we may opt to charge a percentage of the amount recovered but it will be a fair amount relative to the work actually being performed. I believe in treating my clients the way that I would like to be treated: fairly and honestly.
If I can help you, please call my office. Thanks for reading.