Each day across America, thousands of homeowners lose their homes due to foreclosure.
As we enter the early innings of what some now call the “Greater Depression,” and with the economy continuing to deteriorate, the number of foreclosures will only accelerate over time.
Property taxes are charged by each of the 50 states for the privilege of living on state land in a form of modern feudalism.
Even if a homeowner has paid off 100% of their mortgage and burned it in a joyous family celebration, they will continue to pay property tax, which is to say, to rent the use of the state’s land for the rest of their lives.
Or else.
For if you fail to make your property tax payments, the state will forcibly take your property away from you and sell it to the highest bidder.
Let’s see what this process looks like.
If property taxes are not paid to the county for a period of three years (typically), the county will foreclose on the property through the office of the sheriff and conduct a public sale to recover the unpaid taxes.
Likewise, if mortgage payments remain unpaid for three months (typically), the bank or other lender will initiate foreclosure proceedings against the property to recoup the unpaid arrears.
Note that both of these types of foreclosures are against the property, not against the individual homeowner(s).
Because all property law is state law, and since all states are comprised of counties (or parishes in the case of Louisiana), the office of the sheriff initiates the foreclosure process, including forcibly removing occupants and belongings from their home if and when necessary.
At the public foreclosure sale—many are held online these days—the property is offered at auction with the opening bid being the amount of unpaid property tax (in the case of a tax sale), or total unpaid mortgage payments (in the case of a mortgage sale).
The property is sold to the highest bidder and the county keeps that portion of the proceeds that will pay off the unpaid property taxes (plus attorney fees, interest, etc.).
If sold to the highest bidder in a mortgage foreclosure auction, funds are forwarded to the lender to pay the missing mortgage payments plus, again, various miscellaneous fees.
Here is where things become, in modern lingo, more than a bit “sketchy.”
What do 999 out of every 1,000 foreclosed homeowners absolutely believe happened at these foreclosure sales?
They are convinced that they lost their home along with every dime of equity they had built up in the property, regardless of long they had lived there, or how many years of mortgage payments they had already made.
Needless to say, this is a devastating emotional and financial experience and is often accompanied by bankruptcy, a total trashing of one’s credit and the need to move in with friends or relatives.
But this is not what actually happens.
In the vast majority of foreclosure auctions, after the property has been sold to the highest bidder, and after arrears have been disbursed to the county (in a tax sale) or to the lender (in a mortgage sale), there are funds left over.
And quite often, a substantial amount of remaining funds.
By way of example, imagine that the Johnsons owed $8,000 in back property taxes, were foreclosed on by the county, and lost their home in a public auction to the highest bidder who paid $200,000 for the property.
The county received perhaps $10,000 in total taxes, attorney fees and interest, which leaves $190,000 still sitting in the sheriff’s trust account.
These funds are variously called “surplus funds,” “excess funds,” “overages” or “over bids.”
As required by state law, the county mails a first class letter—without so much as a return receipt requested—to the foreclosed homeowner at their last known address.
Which, of course, is the address that they formerly lived at, and no longer do.
The letter informs the party that excess funds are being held in their name, and that all they have to do is stop by the county treasurer’s office, fill out a form or two, show some ID, and pick up a check for the surplus funds being held for them.
The foreclosed homeowner may or may not have filled out a mail forwarding form at the local post office, but even if they did it often takes 30-45 days for the forwarding to kick in.
As a result, the vast majority of these poor souls never receive the letter from the nice people at the county treasurer’s office informing them of the unknown bounty that awaits them.
No doubt many of those who do receive this letter, upon seeing what they perceive as official junk mail from the very same people who just “stole” their house, chuck the letter into the “round file” unopened.
Does the county take any other action to contact these bereft individuals?
No, they do not.
No follow up phone call, no postcard, no email, not even a Christmas card?
Nope, not a one.
The dirty little secret is that these surplus funds, if not collected within a state mandated period of time (typically from one to three years), will “escheat” back to the state where they will no longer be recoverable by anyone.
There are billions of dollars in surplus funds currently being held by over 3,000 counties across America, right this second, and 99.9% of foreclosed homeowners have no idea that these potentially life changing funds even exist.
This practice is so ingrained that states actually depend on these escheated funds to cover a significant portion of their annual budgets, including funding state pension plans, repairing roads and operating nursing homes.
And here is where we step in.
We track down these surplus funds, contact (which is to say, skip trace) the former homeowner, call them on the phone with the good news, explain what happened, obtain their verbal agreement to work with us, forward them the necessary agreement and other legal paperwork, submit said paperwork to the county, get the check, take our fee (typically 30% which also covers research time, payroll, attorney fees, etc.), and disburse the remaining funds to the happy former homeowner.
FAQ
Q: You can't be doing this for free. What do you charge?
A: The total costs of recovery range between 15% and 33% of all funds recovered, depending on the size of the overage and the complexity of the situation.
For example, sometimes there may be a deceased former spouse and co-title holder involved.
The bottom line is that these former homeowners end up receiving a substantial chunk of money that they assumed was lost forever.
Frankly, being in this business can't help but remind us a little of Robin Hood.
I should add that there is ZERO cost to the claimant to work with us.
No money down, no monthly payments, nothing.
We absorb 100% of the costs and do 100% of the necessary work.
When the county releases the funds (and by law, they have to) we all get paid.
Q: What does the former homeowner have to do throughout this recovery process?
A: Nothing at all.
Just sit back, hang tight, and be patient.
We keep them informed every step of the way.
Q: Amazing. How long does this usually take?
A: Typically upwards of 6 months, but often sooner.
There are quite a few steps involved, but the end process is always guarranteed.
You get the money.
Q: And you can help these people get their money back?
A: Not just help them, but get their money back for them.
They sign an agreement to work with us, we sent out a notary to get some approval documents signed, and a network of attorneys and paralegals begins the complex legal process to get these funds released by the county.
Q: And no further effort is made to help these poor people?
A: Nope.
Not by the county, the state, the federal government or the Man in the Moon.
These folks are left out to dry, and many are forced into bankruptcy at the same time.
There are over 3,000 counties in America and they all get away with this.
In fact, the states PLAN their annual budgets around the defaulting of these overages.
Like I said, a national disgrace.
Q: This is simply amazing. Why haven't my banker, my financial planner, my accountant or my CPA ever informed me of this? A: I would not want to insult these nice people, so let's just say that there exists throughout America a certain degree of institutional ignorance.
We are happy to step in and fill this void.
Q: I don't understand. How does this work?
A: The foreclosure process is initiated by the county when you stop paying your property taxes, or by a lender when you stop making your mortgage payments.
An auction is held and your home is sold to the highest bidder.
The proceeds from this sale pay off all debts owed.
And often there is money left over.
Example: The Smiths owe $10,000 in back property taxes.
They still owe the bank $100,000 on their mortgage.
Their property goes into foreclosure and sells at auction for $200,000.
The back property taxes and the mortgage balance are both paid off from the auction proceeds.
This leaves $90,000 still left over (do the math ;-).
These excess funds are variously called "overages," "surplus funds," or "overbids."
Where does this surplus money go?
It doesn't go anywhere.
It stays held in trust by the county IN THE NAME OF THE TITLE HOLDER AT THE TIME OF THE FORECLOSURE AUCTION.
Which is who?: the former homeowner!
There is a formal legal process for the former homeowner to reclaim these funds.
However, if unclaimed within a specified period of of time (typically, one to three years), these excess funds eventually default ("escheat") to the state treasury and can never be reclaimed by anyone.
To clarify, by law the county is required to send a first class letter to the former homeowner after the foreclosure sale, informing them of any remaining overage.
The county does, in fact, send this letter as required by the letter of the law.
They mail it to the address on file: namely, that of the former (and now foreclosed) homeowner who never gets the letter because they don't live there anymore.
This is where we step in.
We work with highly experienced legal experts who routinely obtain these funds for claimants.
Q: What can you show me to prove that the process works? I don't understand. How does this work?
A: The #1 most difficult aspect of the work we do lies in educating disbelieving former homeowners that there could, in actuality, be excess funds being held in their name, when they assumed that they had lost everything.
Most people simply do not believe that this could be possible, and assume that it's a scam.
For this reason, we always make available.
1. County records showing (and proving) that there are funds (overages) remaining from the foreclosure sale.
2. Copies of state statutes pertaining to the recovery of foreclosure overages.
3. A sample (blank) copy of the paperwork we use to enter into an agreement with the client to obtain their funds.
4. Our full contact information, and the phone number and contact information of the attorney we work with (funds recovery is a legal process).
Q: How does this work again? It seems unbelievable. A: It's shocking but true... homeowners who lose their home to foreclosure because they couldn't keep up with their mortgage payments assume that they also lose whatever equity they had in the property.
This is often not the case!
The fact is that, right this second, billions of dollars in surplus funds ("overages") are still owed to millions of foreclosed homeowners across America who have no idea that these funds even exist.
If you are one of these individuals, or if you know of one, you will want to pay close attention.
Here Is How This Works:
A homeowner get behinds on their mortgage payments
The bank or lender forecloses.
An auction is held to sell the property.
Investors come to bid on the property.
The property is sold for more than the loan balance.
The lender receives the funds due to them.
The county where the auction was held receives various legal fees, court costs and taxes.
After the lender and auction costs have been paid, the remaining funds (called surplus funds or overages) are held in trust by the county in the name of the former homeowner.
IMPORTANT: These funds are still the property of the homeowner who was foreclosed on!
By law, the county is required to mail a first class letter to the former homeowner informing them of the surplus funds.
This letter goes to the address of the foreclosed property, but the former owner no longer lives there.
NO FURTHER ACTIONS ARE TAKEN by the county, the state or the former lender to assist the former homeowner to obtain their surplus funds.
After a period of time (typically 2-3 years depending on the state), these excess funds "escheat" back to the state treasury and can never be recovered.
States DEPEND on these unclaimed funds to power their budgets.
Now you know the truth.
These surplus funds are often life changing for the family who lost their home to foreclosure AND HAVE NO IDEA THAT THESE FUNDS EVEN EXIST.
The service we provide is to navigate the complex paperwork and legal channels to obtain these surplus funds on behalf of the former homeowner.
We do this at no up-front cost to the client whatsoever. We only get paid (an agreed upon service fee) when the client gets paid.
What percentage of clients who agree to work with us received their surplus funds?
Every single client who works with us gets their money (100%). Still Disbelieving?
The #1 most difficult aspect of the work we do is tracking down and contacting ("skip tracing") these former homeowners and explaining that there are, in fact, funds waiting for them to claim.
Most people simply do not believe that this could be possible, and assume that it's a scam.
For this reason, we always make available.
1. County records showing (and proving) that there are funds (overages) remaining from the foreclosure sale.
2. Copies of state statutes pertaining to the recovery of foreclosure overages.
3. A sample (blank) copy of the paperwork we use to enter into an agreement with the client to obtain their funds.
4. Our full contact information, and the phone number and contact information of the attorney we work with (funds recovery is a legal process).