What with surging real estate values in many parts of the U.S., some foreclosed homes are netting more than what the lender is owed on the property. The law states that once all debts, liens and fees have been paid off following a foreclosure sale, the previous homeowner is entitled to whatever is left over - but many don't know their rights, and haven't claimed the money which rightfully belongs to them, Realtor.com reports.
Officials in Denver County, Colo., for example, say that almost $1.5 million that was made from the sale of around 50 foreclosed homes is sitting in its coffers, waiting to be collected by the previous homeowners.
“In the past, people who lost their homes to auctions were typically underwater. [Now] prices have risen so that real estate investors, especially at auctions, are sometimes willing to pay more than what the [homeowner] lost it for,” says Brandon Turner, author of “The Book on Rental Property Investing.”
Unfortunately for the homeowners concerned, no one appears to be that interested in letting them know they could be missing out.
Portland, Ore., Denver, Seattle, and Miami are all places where home prices are rising fast, and struggling homeowners may find more windfall profits in foreclosure auctions. As such, Realty Biz News would advise anyone who was recently foreclosed upon in those areas to get in touch with local officials and make sure they're not owed any money.
“Denver is one of the hottest real estate markets in the nation right now,” says Mica Ward, spokeswoman for the public trustee of Denver County. “So when a home does have to sell at a foreclosure auction, we’re consistently seeing that the home is selling for more than what is owed.” She estimates that about 80 percent of foreclosure auctions in Denver County result in surpluses over the original debt. She returned up to $169,000 to one foreclosed homeowner this year following an auction.