Char: Previous answers indicate that the way it works is that the sheriff turns all the proceeds over to the entity that commenced the foreclosure. They, in turn, disburse as per the outstanding liens. The residuum, if any, is then is due the homeowner. While I can't verify this, never having seen a specific outcome where there was a residual amount, I'd add just one thing:

That is this, whether the amount is large or, more likely, small, it may be a great deal to the dispossessed homeowner. While they may still be in place at the property, (eviction comes after the transfer of ownership, since you can't evict an owner from his own property, except if there is some hazard,) some people do move away early and if that is your personal circumstance or that of someone you know, be sure to let the party with the funds to disburse know where to find you. While, in the case where the proceeds do not cover the loan, the lender has a right to come after the borrower, in most cases they do not. The same cannot be said in short sales, where, I hear of cases that, for some odd reason, the lender demands that the homeowner agree to pay the remaining balance. I say odd reason, because it would appear that the lender already knows that the borrower is in financial difficulty over their head and hands and has little prospect of being able to carry this debt and simultaneously restart their life.

That 's just an opinion of mine.

My best wishes to you and to anyone in this position. I ain't fun, McGee.

Right.... what I first said.

Jefferson was correct. Funds received are received by the the mortgagee foreclosing on the property. It is their responsibility to disburse the funds to the other lien holders in order of priority and then if money is left over, to send those funds to the mortgagor that was foreclosed.

Since this is not a normal situation, there are times that these funds do not get disbursed to the home owner. All other lien holders typically get paid because they follow up, but the home owner does not always follow up. Typically most banks have a Quality Control process and this would be when then funds are dispursed but this process could be up to 6 months after the foreclosure sale.

Char,

Once all liens are satisfied in order of priority, the rest goes to the owner that was foreclosed on. A little known fact is that in most states that NO ONE is actually responsible to let the owner know about their leftover money. It's generally up to them to check w/ the county after the foreclosure to see if there's any left for their pockets.

Actually, this is an excellent question. I would assume that the monies go to the primary mortgage holder, then it goes to all other lien holders and finally the balance to the owner. But we all know how "assume" is spelled. Asking the county sheriff department would be your best bet.

Sorry I could not give you a better answer.

Terrence Charest, e-Pro