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You may be entitled to surplus funds after the foreclosure sale of your home in Washington State if your home sells at a trustee sale for more than you owed on your mortgage(s) or judgment liens. You may be notified by a foreclosing trustee or perhaps a business or individual who seeks to “help” you obtain the funds on your behalf.  It is important that you know your rights with regards to foreclosure surplus funds and speak to a foreclosure surplus funds lawyer to learn about your options.  Often times former homeowners who had their homes foreclosed upon according to the foreclosure timeline in Washington State are unaware that if somebody makes a bid at auction over the amount that is owed on the property, then you may be entitled to those surplus funds. 

If you think you may be entitled to foreclosure surplus funds in Washington State, then you will want to know 7 things about Surplus Funds as outlined below or you can listen to attorney Richard Symmes discus 7 things to know about surplus funds on 1150 am KKNW radio here:


1. Surplus Funds May Be Available After a Foreclosure Sale

Surplus funds received by a foreclosing trustee on behalf of the owner of your mortgage note, such as Quality Loan Servicing, Clear Recon Corp., McCarthy Holthus, LLP or ZBS Law, LLP if available will be placed in the Superior Court of the county in which the foreclosure sale took place per RCW 61.24.090.  Notice will be sent out to any interested parties, such as the previous homeowners per RCW 61.24.040(1)(b), notifying them of the funds and to claim the funds if they think they may be entitled to them.  If you have moved and a foreclosing trustee does not have your new address on file, you may never receive this important notice so you will want to do your own due diligence by following up with your foreclosing trustee to check to see if they received any surplus funds and what your former property may have sold for to determine if there are surplus funds available that you could claim.     

2. Obtaining Surplus Funds After a Foreclosure Sale Requires a Court Order

Once you determine that there are surplus funds available after a foreclosure sale in Washington State either by contacting the foreclosing trustee, superior court where the house was located or receiving a notice in the mail, you will likely need to seek professional assistance if you are unable to navigate the legal process on your own.  

Unfortunately, you cannot simply show up at the courthouse and demand they turnover the funds to you.  Once the Surplus Funds are deposited with the superior court, parties with an interest in those funds may claim them in a specified order. “Interests in, or liens or claims of liens against the property” at issue attach to the Surplus Funds “in the order of priority that it had attached to the property”. RCW 61.24.080(3).

Where Surplus Funds remain after payment of all junior lien holders, the owner of record at the time of the trustee’s sale may assert a claim in such Surplus Funds. See also RCW 61.12.150 (providing for disbursement of Surplus Funds following a judicial foreclosure).

A request for disbursement of Surplus Funds may be made at any time after the trustee’s sale, upon 20 days’ notice, by a written motion and a hearing in the superior court for the county in which the Surplus Funds were deposited. See RCW 61.24.080(3); RCW 61.12.150.

If this specific process and the laws are not followed per the Washington State Superior Court Rules in your county for setting a hearing, providing proper pleadings and evidence, then your claim to the funds may be unsuccessful and the Court will not sign an Order, Ordering the court to turn over the Surplus Funds causing frustration and delay.     

3. Don’t Hire an Out of State Company to Assist you Obtaining Surplus Funds

It is common that consumers are unaware that they have surplus funds after a foreclosure sale in Washington State due to moving or otherwise. These consumers may receive a letter at a later date that they may have surplus funds available and owed to them.  These letters are typically from companies or individuals with no legal training, many of which are out of Washington state and often from California, who claim they can locate these funds and can distribute them to you for a finder’s fee.

Many of these companies are predatory in nature and may not be following the laws of Washington State with regards to Surplus Funds owed to you from a trustee’s foreclosure sale.  It is never a good idea to sign away your rights to these funds without first talking to an attorney in Washington State. Up until 2023 when the revised Washington State Unclaimed Property Act goes into effect, Washington State limited how much these companies or individuals can charge for these services which is up to 5% of the total surplus funds per RCW 63.29.350Companies that violate the surplus funds from foreclosure law could have found themselves in big trouble facing a misdemeanor and shall be fined not less than the amount of the fee or charge he or she has sought or received or contracted for, and not more than ten times such amount, or imprisoned for not more than thirty days, or both.  Starting in 2023, a fee charged by a finder may be limited to what is reasonable and not unconscionable. There is also an exemption for attorneys to pursue claims specifically for a limited item or claim.  

Some of these out of state companies may attempt to charge a fee of 25-50% of the total funds available which will put less funds in your pocket, may be illegal, and you may be dealing with non-attorneys who may solicit actual attorneys to do the legal work for them regardless as they are ill equipped to complete the legal work required to obtain the surplus funds on your behalf.  

4. Anybody Can File a Motion to Obtain Surplus Funds

Yes it is true that if your home is foreclosed upon due to a trustee sale in Washington State and Surplus funds are deposited in the Superior Court, anybody including you can make a claim for the surplus funds.  With that said, anybody making a claim would need to file a motion and seek a court order to turnover the funds and explain why they are entitled to the funds.  If they cannot provide supporting documentation as to why they should receive the funds, a judge may deny their motion and not sign a court order.

5. Obtaining Surplus Funds Can Take on average 30-45 Days

Once the Surplus Funds from a Trustee Sale Have Been Deposited with the court, if you act as quickly as possible, it could take 30-45 days until you see the funds in your hand.  With that said it can take several months sometimes post foreclosure sale for the foreclosing trustee to deposit the funds with the Superior Court in Washington State and end their involvement in your case.  

Once the funds are deposited you can file your motion requesting turnover of the surplus funds but must give other parties 20 days’ notice to also make claims to the funds.  If there is no dispute as to your claim and you have filed the required docs properly and set your hearing, a superior court judge will sign your court order, ordering the turnover of the funds.  From here, that court order goes to the department of the superior courthouse that holds the surplus funds.  This department may only cut checks on certain dates per month which can cause a delay in getting the funds to you.  Therefore, there is a waiting period until you will actually see the funds, but they should be disbursed per the court order’s instructions as you have submitted to the court.  

6. Typical Fees You Pay Will Depend on Your Situation

The costs involved will be determined whether you hire a surplus funds recovery attorney or not, a third party as discussed above, or try to handle things on your own.  Regardless there may be fees associated with the release of Surplus funds from a trustee sale which include

(a) Ex-parte and working copy fee’s submitted online that ranges between $20 and $35, depending on the county.  

(b) The cost of mailing the motion pleadings and exhibits to each party for service via USPS and certified mail.

(c) If you require documents from the court related to the motion or trustee’s sale, there may additional costs associated with obtaining such copies. 

At current postage rates, and assuming between 5-20 notice parties, the total costs associated with a pro se application for the release of Surplus funds are estimated at $75 to $225.

(d) If you hire a surplus funds recovery attorney, your legal fees may be based on a percentage of the total funds available or you may pay significantly more if you decide to hire an out of state company who may be engaged in illegal activity as discussed above. 

7. Complications May Arise in Claiming Surplus Funds from a Trustee Sale

If there were several owners of property or you had several liens on the property that were not paid when your home was foreclosed, these other parties may oppose your motion to distribute the surplus funds to you.  For example, if you had an ex-spouse who you owned the foreclosed property with in equal shares when it was foreclosed and you go to requested the surplus funds, your ex-spouse may oppose your motion and litigation may ensue if you cannot work it out on your own. 

Third party creditors who may have liens on the foreclosed property may also make claims to the surplus funds from the trustee sale.  As discussed earlier, any motion filed to request the surplus funds from foreclosure, requires you to give notice to any party in interest who may have a claim to such funds, failure to put everybody on notice of your motion, may result in your motion being denied.

Finally, if you don’t follow the proper procedures, local court rules, submit documentation through evidence to claim the funds in order to grant your motion, you may become frustrated and disappointed in trying to navigate what may seem like a foreign procedure when you think it should be a simple process.  Unfortunately judges and the court must abide by the proper procedures and laws in order to distribute the surplus funds.  

Call Today For A Free Consultation With a Surplus Funds Recovery Lawyer at Symmes Law Group!

If you had a home foreclosed upon in Washington State due to a trustee sale and you believe you may have funds owed and need assistance recovering the funds, give Symmes Law Group a call at 206-682-7975 or contact us to get the counsel you need.

  • Richard Symmes

    Hi, Richard here.

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