Colorado Foreclosure Surplus Funds: A Guide for Former Homeowners

When a property is sold at a foreclosure auction in Colorado, it sometimes sells for more than the total amount owed on the mortgage, liens, and foreclosure costs. This extra money is known as "surplus funds" or "excess proceeds." If you were the former homeowner, these funds legally belong to you.

Finding out if you are owed surplus funds can be confusing, but it's a critical step toward recovering money that rightfully belongs in your pocket. This guide will walk you through the process specific to Colorado, helping you understand where to look and what steps to take.

Understanding Surplus Funds in Colorado

In Colorado, judicial foreclosures generally involve a court process, while public trustee foreclosures are non-judicial. The existence of surplus funds can arise from either. The common thread is that the sale price exceeded the outstanding debts.

For example, if your home was foreclosed upon and sold for $300,000, but the total amount you owed (including the mortgage principal, interest, late fees, attorney fees, and other costs) was $250,000, then there is a surplus of $50,000. That $50,000 belongs to you, the former homeowner.

It's important to remember that these funds do not automatically get sent to you. A proactive claim must be made. If no claim is made within a specific timeframe, the funds could eventually be escheated to the state.

Where Surplus Funds Are Held

The location where surplus funds are held depends on the type of foreclosure:

• Public Trustee Foreclosures: In Colorado, most foreclosures go through the Public Trustee's office in each county. If there are surplus funds from a public trustee sale, they will typically be held by the Public Trustee of the county where the property is located. The Public Trustee is responsible for notifying parties who might have an interest in these funds, though sometimes these notices can be missed or not received.
• Judicial Foreclosures: If your property was foreclosed through a court action, the surplus funds would generally be held by the court clerk's office until a court order directs their disbursement.
• Tax Lien Sales: While less common for significant surplus funds, if a property is sold due to unpaid property taxes, any excess proceeds after satisfying the tax debt and costs would be held by the county treasurer's office.

How to Determine if Surplus Funds Exist

Check with the County Public Trustee

For public trustee foreclosures, this is your primary point of contact. Many Public Trustee offices in Colorado have websites where you can search for foreclosure records, including sale results. Look for the county where your foreclosed property was located. On their website, you can often find a