In recent years, there has been a notable increase in foreclosure sales resulting in surplus funds due to rising property values. This trend presents opportunities and challenges for Illinois condominium and homeowners associations (HOAs) seeking to recover unpaid assessments and other charges.
What Are Surplus Funds?
Surplus funds are the excess proceeds from a foreclosure sale after satisfying the foreclosing lender’s claim. For example, if a property sells for $450,000 but the outstanding mortgage is $400,000, the $50,000 difference constitutes surplus funds. These funds are held by the court or trustee until distributed to eligible claimants, such as junior lienholders