What Are “Surplus Funds” After a New Jersey Foreclosure Sale?
When a sheriff’s auction brings more than the foreclosed homeowner owed—including the judgment amount, interest, taxes, and fees—the extra money is called surplus funds. Under New Jersey Court Rule 4:64‑3, those funds are held by the Superior Court Trust Fund for the benefit of the former owner and junior lienholders.
Simple Example
| Auction Bid | $327,000 |
| Total Payoff | $298,400 |
| Surplus | $28,600 |
Who Gets the Money First?
- The record owner on the date of sale (or that owner’s estate).
- Junior mortgagees, judgment creditors, and lien claimants in order of priority.
Why the Court Holds the Funds
The Trust Fund ensures the money is distributed only after valid claims are filed and a judge enters an order. This prevents the foreclosing lender from keeping the windfall.
Key Takeaways
- Surplus funds are your equity—not the bank’s.
- You generally have up to 10 years after the sale to claim them.
- A motion, supporting affidavit, and proposed order are required.
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