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72 I N D U S T R Y I N S I G H T / N I C H O L A S J . V A N H O O K A N D J A N E E . B O N D Ever since the United States housing market collapse in 2008, when a lender instituted a foreclosure action and obtained a Final Judgment of Foreclosure, the foreclosure sales process has remained relatively straightforward in Florida. e property is listed for sale at a public auction, a Certificate of Title is issued to highest bidder—typically the lender, for a nominal amount—and the property is placed in that lender's book of real estate owned until it is eventually marketed and sold to the general public. e primary reason this process has been so straightforward has been based on one simple fact: the Final Judgment of Foreclosure was for an amount substantially more than what the property was worth. Since the lender received a credit bid at the foreclosure sale for the value of its judgment, third-party purchasers were rarely the highest bidders at the public auction. e logic behind this standard course of events is simple. Why would a third party pay more for a property than what it was worth? Simply put, they wouldn't. THE NEW NORMAL Fast-forward over a decade and the process, outlined above, is becoming less standard. Once again, the reason is based on one simple fact: property values have not only stabilized over the past decade but have also increased to a level that the Final Judgment of Foreclosure obtained by a lender is often for an amount less than the property's value. erefore, those third-party purchasers, who were nowhere to be found 10 years ago, are now competitively bidding at foreclosure sales, and the winning bid is often tens of thousands of dollars more than the Final Judgment of Foreclosure. ese surplus funds are then held by the County Clerk, pursuant to 45.032, Fla. Stat., until a court order is entered determining how the funds should be distributed. In this current era of surplus funds becoming the norm as opposed to the exception, the $64,000 question is, who is entitled to these funds and what is the proper procedure to ensure they are obtained? It is well established under Florida law that any surplus remaining after a foreclosure sale should be paid to the junior lienholders based on their priority as it relates the foreclosed property. Only after junior liens have been satisfied can the prior homeowner receive any surplus funds [General Bank, F.S.B. v. Westbrooke Pointe, Inc., 548 JUNIOR LIENHOLDERS: CLAIM YOUR SURPLUS FUNDS New laws could complicate the foreclosure sales process moving forward.

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