Surplus Funds Recovery Attorney for Los Angeles and Orange County

When a California home is sold at a trustee’s sale, the buyer’s money first pays off the loan that foreclosed. Whatever is left is called surplus funds, and the law puts the former owner in line to receive it. Fred Yadegar helps former homeowners, heirs, and lienholders across Los Angeles County and Orange County claim that money. You’ll be dealing with a licensed California attorney, not a recovery company.

What surplus funds are, in one example

Say you owed $310,000, including missed payments, late fees, and the trustee’s costs of sale. An investor bids $420,000 at the auction. The trustee pays the lender its $310,000 and is left holding $110,000. That is the surplus.

It does not go straight to you. Civil Code §2924k sets the order: costs of the sale, then the foreclosing loan, then junior liens in order of priority (a second mortgage, a HELOC, an HOA lien, judgment liens), then the former owner or the former owner’s successor in interest. A $40,000 second mortgage on the house is paid before you, and you receive $70,000. With no junior liens, the full $110,000 is yours.

How the claim process works

The trustee holds the money at first. Within 30 days after the trustee’s deed is executed, it must mail notice of the surplus to everyone with a recorded interest in the property (Civ. Code §2924j). You then have 30 days from the mailing to submit a written claim, signed under penalty of perjury, with proof of who you are and what you are owed. Undisputed claims are paid within 30 days after that window closes.

If claims conflict, the trustee deposits the money with the clerk of the superior court in the county of sale, with a declaration describing the unresolved claims, and mails a second notice. Claimants then have 30 days to file with the court, and a judge decides who gets paid at a hearing. Deposits of $25,000 or less are handled as a limited civil case.

That first notice usually goes to the foreclosed house, so many former owners never see it. Missing the window does not end your rights, but the longer you wait, the more steps it takes.

Who can claim

• The former owner, or the vested owner of record at the time of sale
• A successor in interest who took title by deed before the sale
• Heirs or the estate of an owner who has died
• Junior lienholders, including HOAs, second-mortgage lenders, and judgment creditors

Is this a scam?

Fair question. After a foreclosure, “asset recovery” outfits write offering to find your money for a large cut of it. California regulates those non-attorney businesses as foreclosure consultants (Civ. Code §2945 et seq.); a licensed attorney is exempt because the State Bar already regulates us. Fred Yadegar is State Bar #244184; check us there before you sign anything.

What we handle

• Overage and surplus funds recovery: the claim itself, start to finish
• Post foreclosure assistance: the 90 days after the sale
• Real estate: title, liens, and co-owner disputes
• Probate for properties without a will or trust: opening the estate so heirs can be paid
• Trustee sale: how the auction works and how to read the records
• Wrongful foreclosure: when the sale itself was not done right
• Heirship of a foreclosed estate: when the former owner has died

County tax-sale excess proceeds are also handled, different rules apply: that money comes from a tax-defaulted property auction, and the claim must be filed within one year of the recording of the tax deed (Rev. & Tax. Code §4675).

What it costs

No upfront fees; our fee comes only out of funds we actually recover. If we recover nothing, you owe no fee. Costs may be advanced and repaid from the recovery; the written fee agreement spells that out before you sign.