Excess sale proceeds are those funds left after a lender foreclosed on a home/property. The laws of each state dictate the process to claim excess sale proceeds.
The law of the state where the property is located controls the foreclosure or trustee sale process. The links to this page deal solely with Arizona law as governing Arizona real property.
Please Note:
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship. It is also important to note that the information contained in this article may be outdated.
It is very important that you obtain legal advice from an experienced bankruptcy attorney regarding your particular situation. Consultation before you take action will certainly cost you less than what it will cost to fix your unintentional errors.
Once the trustee’s sale has been completed there monies left over because the lender who foreclosed has been paid in full. These extra monies are called “excess sales proceeds”. All junior lienholders and the property owner at the time the property was sold have a right to apply for those funds. The Trustee conducting the Trustee’s Sale will deposit (in most cases) the funds with the County Treasurer or Assessor, a complaint will be filed by the Trustee and served on everyone listed on the title policy. At that point the junior lienholders and/or the old property owner can file an application with the Court. There are notice requirements and most likely the court will have a hearing on the distribution of any monies. See Arizona Revised Statutes – 33-812. In order of obtain the funds the applicant must have a signed, certified copy of the final Order from the Court, plus a fee payable to the Treasurer (of Assessor) and a signed W-9.
There are many vultures praying on those who have lost their homes through a trustee’s sale or foreclosure. These vultures are running scams to take most, sometimes all, of the equity which should be paid to the homeowners. There is a lot of equity or “excess sale proceeds” today – given the value of the houses in the 2005-2006 market.
The law Arizona Revised Statutes – 33-812. specifically limits what these vultures are permitted to do (charges, etc), yet most are blatantly ignoring the law and robbing the homeowners of thousands of dollars in hard-earned equity in their home. Despite these laws I have received numerous reports of changes in excess of 50% of the entire amount – with no limit on the maximum charges. Their actions evidence a complete refusal to honor the limits set by law. These folks are prohibited from obtaining a binding contact for at least 30 days after the trustee’s sale, yet they are normally on the doorstep the day after the sale. The requirement to obtain these excess sale proceeds is that you must actually own the home on the date of the trustee’s sale. These vultures know this requirement and approach the homeowner the day or two before the sale offering to buy the home for a small amount. They completely fail to tell the homeowner that there will most like be several thousand dollars available after the sale is complete, but that only the person who owns the home on the day of the trustee’s sale can request these funds. Know your rights and talk to a competent attorney who is experienced and in good standing with the State Bar of Arizona. Ask other experienced attorneys for referrals.
This firm has returned $800,000 to homeowners as excess sale proceeds.
Funds that may be available to a homeowner after a trustee’s sale.Client Reviews and Comments - Excess Sale Proceeds
Diane, Thank you for the good news and for being nothing less than a “stellar” legal representative, a great and understanding sounding board for me during a most difficult and emotional time period, and a most patient person with all my various questions. Say thanks also to Jay for me, he was also of great assistance in the documentation process and in answering procedural process questions regarding the required documentation needed to complete the file for submission and receive the funds.
This was a painless experience. Diane and Jay took complete care of me and all questions were answered in a timely manner. I would highly recommend!
EXCESS SALE PROCEEDS: P. and I would like to thank you both, especially you Jay, for all the work you did in obtaining our Excess Funds check today. You somehow managed to get this done between January and June and I know how persistent you were. P. and I would like you to know that you can use us a a referral for Excess Funds clients anytime you need to. We were very impressed with what you did and the knowledge you had in getting the job done. It didn’t take me long to realize there are a lot of swindlers out there offering to do the same thing, but when I talked to you back in December, 2013 Diane, and had read your many articles on Excess Funds, I really felt I could trust you. That was one of the best decisions I’ve ever made and we will always be grateful for how you’ve helped us. When you’ve had to walk away from the home you love, being able to secure the Excess Funds through a firm you can trust makes all the difference in the world. Great job!
Please Note:
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship. The information, documents or forms provided herein is intended for general information purposes only and must not be regarded as legal advice. It is also important to note that the information contained in this article may be outdated.
This brief outline is not intended to replace the advice of an experienced real estate attorney. It is very important that you obtain legal advice regarding your particular situation. Consultation with an experienced real estate attorney before you take action will certainly cost you less than afterwards. I do not say this to scare you, I say it to put you on fair warning as to the exposure you may face.
Excess Sale Proceeds After A Trustee’s Sale, by Diane L. Drain
Once the trustee’s sale has been completed there monies left over because the lender who foreclosed has been paid in full. These extra monies are called “excess sales proceeds”. All junior lienholders and the property owner at the time the property was sold have a right to apply for those funds. The Trustee conducting the Trustee’s Sale will deposit (in most cases) the funds with the County Treasurer or Assessor, a complaint will be filed by the Trustee and served on everyone listed on the title policy. At that point the junior lienholders and/or the old property owner can file an application with the Court. There are notice requirements and most likely the court will have a hearing on the distribution of any monies. See Arizona Revised Statutes – 33-812. In order of obtain the funds the applicant must have a signed, certified copy of the final Order from the Court, $30.00 payable to the Treasurer (of Assessor) and a W-9.
There are many vultures praying on those who have lost their homes through a trustee’s sale or foreclosure. These vultures are running scams to take most, sometimes all, of the equity which should be paid to the homeowners. There is a lot of equity or “excess sale proceeds” today – given the value of the houses in the 2005-2006 market. The law Arizona Revised Statutes – 33-812. specifically limits what these vultures are permitted to do (charges, etc), yet most are blatantly ignoring the law and robbing the homeowners of thousands of dollars in hard-earned equity in their home. For instance – ARS 33-812 specifically limits the right to charge the homeowner more than $2,500.00 for “recovery of or assistance in the recovery of excess proceeds”, absent unusual circumstances that the judge must approve. Yet, I have received numerous reports of changes in excess of 50% of the entire amount – with no limit on the maximum charges. Their actions evidence a complete refusal to honor the limits set by law. These folks are prohibited from obtaining a binding contact for at least 30 days after the trustee’s sale, yet they are normally on the doorstep the day after the sale.
The requirement to obtain these excess sale proceeds is that you must actually own the home on the date of the trustee’s sale. These vultures know this requirement and approach the homeowner the day or two before the sale offering to buy the home for a small amount. They completely fail to tell the homeowner that there will most like be several thousand dollars available after the sale is complete, but that only the person who owns the home on the day of the trustee’s sale can request these funds.
What is the Arizona law limiting fees to recover the excess fees? Arizona Revised Statutes: 33-812(o) A claimant may enter into an agreement with a third party to pay for the recovery of or for assistance in the recovery of excess proceeds on deposit with the county treasurer. The agreement shall be in writing, signed by the claimant, and the claimant’s signature shall be acknowledged by a notary public or other person authorized to accept an acknowledgment pursuant to section 33-511. Any agreement entered into before the expiration of thirty days after the date the trustee’s sale was held, but not including the date of the sale, is void and unenforceable. Any fee or payment provided for in an agreement shall be reasonable. The fee or payment shall be presumed to be unreasonable and the obligation to pay the fee or payment is unenforceable if the fee or payment agreed on exceeds two thousand five hundred dollars excluding attorney fees and the costs of filing the claim and providing the statutorily required notices. Any person seeking a fee or payment exceeding two thousand five hundred dollars may apply to the court for additional compensation but the person has the burden of establishing that the additional compensation is reasonable under the circumstances. This subsection does not preclude a claimant from contesting the reasonableness of any fee or payment that is provided for in an agreement for the recovery of or for assistance in the recovery of excess proceeds.
One such example is: on or about December 4, 2005 at 4:30 pm R. G. approached one of my clients, indicating that my client may have a right to $90,399.05 in equity after his home had been sold in a trustee’s sale. Mr. G’s his business card indicates that he is a case specialist with The Alliant Group, Equity Division. The flyer my client received was from Reach for My Home, Inc, a Non-Profit Organization, and includes Mr. G’s name and number as the only contact information. According to my client, Mr. Garrett showed him a thick booklet from Reach for My Home detailing how Reach could help my client. At this time my client had lost everything, his home, his business, and his dignity. His only place to move was a trailer on his sister’s property. Mr. G offered a “deal”. If my client signed a contract with them he would receive approximately $40K in about 3-4 weeks, with no guarantees. This would be 50 percent of the excess sale proceeds, minus a large fee for the Alliant Group. The trustee’s sale had been conducted on November 16, 2005. Had my client agreed to these outrageous terms he would have lost almost $50,0000.
According to the records of the Arizona Corporation Commission: Reach For My Home, Inc. alleged to be a “Non-Profit” organization, is operated by Ingrid Joy Warrick. A quote from Reach Form My Home’s web site: R.E.A.C.H. – Resources, Education and Counseling for Homeowners, Incorporated is the only non-profit organization in Arizona to offer FREE foreclosure information. The Alliant Group, Equity Division and Reach For My Home operate out of the same building – 1530 N. Country Club Dr, Mesa, AZ 85201. Alliant is owned and operated by Rick Rickert and Dennis Reardon.
According to the State Bar of Arizona Ms. Warrick graduated from the University of Detroit Law School, and was admitted to practice law in 2004. According to the Maricopa County Superior Court, from approximately June of 2005 to 2008 Ms. Warrick has filed approximately 45 excess sale proceeds cases, with Alliant taking an assignment in at least 17 of the cases. The funds involved – more than $2.5 million dollars. A search of the Maricopa County Recorder’s office lists approximately 21 Irrevocable Assignment of Full Interest in Excess Proceeds to The Alliant Group. The Assignment states that the original homeowner irrevocably gives up all their interest in the proceeds to the Alliant Group.
An example: Case number CV 21006-004541 – one homeowner was entitled to $42,779.79, but assigned all his rights to Alliant (recorded 2/24/06 at instrument 2006-0253595). The homeowner allegedly agreed to accept only $16,250.00 out of the $42,779.79. Ms. Warrick’s Contract for Services indicates that “It is further acknowledged that pursuant to Arizona law, the excess proceeds may not be disbursed for twelve (12) months or more.” ARS Section 33-812 controls the time frame – there is no reference to 12 months. Ms. Warrick filed the application for the proceeds on April 21, 2006 and the order approving the funds was signed on August 4, 2006. According to this Contract for Services Ms. Warrick was to receive $2,500.00, plus costs, plus $225 per hour for “answering any objections, court appearances, etc”. Plus, the client agreed to pay a “third Party Provider” an additional fee of $2,500.00 for “any services that the Client may require prior to the release of any excess proceeds”.
October 31, 2011: Ingrid Joy Warrick suspended from the practice of law for 3 months – see the Arizona Supreme Court’s Report and Order regarding her actions: http://www.supreme.state.az.us/dc/2010_Scanned/DCReports/Warrick_DCrpt_11310.pdf and http://www.supreme.state.az.us/dc/2010_Scanned/JOandOrders/WarrickJO040610.pdf. On October 31, 2011 the disciplinary panel of the Arizona Supreme Court signed a report and recommendation denying Ms. Warrick’s request that her license to practice law be reinstated.
According to the State Bar of Arizona’s web site: “By judgment and order dated July 5, 2013, Ingrid-Joy Warrick, Phoenix, was reprimanded and ordered to pay restitution and assessed the costs and expenses of the disciplinary proceeding. Ms. Warrick, a suspended member, possessed a business card, which a member of the public obtained, that identified her as “Ingrid W. Joiya, Esq., Member/Manager” of Elements Therapeutic Dispensary Systems, LLC. (ETD). Ms. Warrick was also ordered to pay restitution in satisfaction of monies owed under the terms of a promissory note that she signed on behalf of ETD.
Neither debtors nor creditors want to be involved in a bankruptcy. This law is designed to assist both groups in protecting their interests in property. Good representation is imperative in making the right decisions and avoiding the pitfalls.
We represent individuals and small companies who use bankruptcy in order to protect their assets. It is very important that debtors understand their rights and use the full value of the law in protecting their property. Bankruptcy can be used to stop foreclosures and trustee sales, stop wage garnishment and the harassment of phone calls to both home and work. In addition, we assist larger companies in bankruptcy, but co-counsel with other very experienced bankruptcy attorneys in order to keep legal fees to a minimum.
We also assigned creditors in protecting their rights in Bankruptcy Court. We represent large national and individual lenders in situations where a home owner has filed bankruptcy. Normally this bankruptcy has been filed because our firm is in the process of conducting a trustee’s sale or foreclosure of the debtor’s property. The bankruptcy is used to give the debtor time to cure the arrears and/or pay off the debt.
Since 1985 this firm has represented some of the larger national lenders with real property lien enforcement, including trustee sales, foreclosures and forfeitures. We have done over 3,500 trustee sales. Even though the process is automated we still give each file individual attention so that your interests are protected. A trustee’s sale is too sophisticated a process to leave to companies are not dedicated to providing specialized services trustee’s services to their clients. In our office every trustee’s sale is personally supervised by an attorney that is an expert in trustee’s sale. No title company or trustee sale process company can give you the type of service that we guarantee.
I love working for people who have financial challenges because I can actually make a difference in someone’s life. Nothing makes me feel better about my day than helping a client, who is barely existing on a minimum wage, stop a creditor from garnishing their wages. I feel like I have contributed to my client’s peace of mind when I contact a very aggressive collector to let them know that they are now permanently prohibited from ever contacting my client or trying to collect the debt. Years later it is a joy for me to hear from a client who has been able to refinance their home or buy a new car. This is truly why I went to law school.
-Diane L. Drain
All of this and more is why I wake every morning excited that I can help both debtors and creditors understand bankruptcy. The banking industry would argue that borrowers choose to accept and use credit cards and take on loans. Borrowers also sometimes choose to obtain money from a loan shark yet the lender is prohibited by law from breaking any bones for late or non-payment. There also is free choice involved when an innocent person discloses personal information to an unscrupulous telemarketer, yet the consumer fraud division of the state attorney general’s office will still protect the individual. Banks, due in large part to their greed, sometimes make flimsy investments, yet they receive, at taxpayer expense, a bail out. Credit card users need a bail out – thus bankruptcy laws are developed.*
Bankruptcy is specifically authorized in United States Constitution, Art. 1, Section 8 (4). Bankruptcy laws are very powerful and they are all encompassing. Bankruptcy affects people and small companies in many ways. Other laws must bow to the bankruptcy laws. A divorce, a lawsuit and a foreclosure of property are all put on hold until, and only if, the bankruptcy is no longer in force, or the Bankruptcy Court gives those creditors permission to continue with their actions. A bankruptcy practitioner must know a little bit about everything – taxes, labor relations, divorce are just a few. Perhaps now you begin to see what I mean when I say that bankruptcy law is fascinating.
All of this may not sound like such a big deal to some of you with deep-rooted negative feelings about the bankruptcy law, but it illustrates an important point. When a bankruptcy petition is filed people’s lives can change dramatically for both creditors and debtors. The basic principals behind bankruptcy is to permit the debtors an opportunity to get a fresh start and the creditors are to receive equal distribution of available assets. What a magical theory! Before filing bankruptcy someone’s life is barely held together – they are terrified of answering their own phone; they are embarrassed at work by calls from collection companies and they may be in fear of losing their home or car. After a bankruptcy is filed many of my clients tell me that they can breath easier and sleep through the night. They go to work with their heads held high; they are not afraid to answer their phones and they can actually open their mail without feeling sick.
Some creditors, especially credit card companies, have become outrageously greedy, and sometimes very deceitful. Many times these creditors have actually been the reason that my clients are forced to file bankruptcy. For instance – a collection company for American Express told my client, an 82-year old widow, that he “had the legal right to bring a moving van to her house and take anything he wanted”.
These stories abound with every consumer debtor attorney. The horror that our clients have to endure is outrageous. Don’t misunderstand me, I am an honorable woman who believes that everyone should pay their debts. But, if those debts have become so burdensome that my clients are choosing between buying required medicines or paying the credit card – then I am thankful they have the Constitutional right to file for bankruptcy protection.
Can you now see how the very economy of our country would be directly affected if we were not protected by these well founded principles of bankruptcy? Perhaps this helps you understand how important bankruptcy is to our daily personal, professional and social lives. Every one of us would be directly affected if the bankruptcy laws did not exist.
Therefore, the next time someone mentions the word “bankruptcy,” don’t be so quick to form a negative opinion and assume “failure” goes hand-in-hand with bankruptcy. It actually takes more time, energy and will power to put yourself under the close scrutiny of the bankruptcy process than it takes to close the business or go underground as a consumer. Think of it as an area of law that holds our lives together and keeps us functioning as a growing and healthy economy. Give bankruptcy law the credit it deserves and you will find it to be a fascinating field of law.
Sometimes the debtors are abusing creditors. The debtors take on debts that they never intend to pay. The debtors falsify their financial statements. They purposely lie about assets and use every method to mislead old and new creditors. The bankruptcy laws are also designed to help protect the creditors. If a debtor sells assets for less than they are worth, puts debts on credit cards knowing that they cannot pay the debts or fraudulently takes money without the intent of paying – those creditors are not the aggressors; they are the good guys. The bankruptcy laws permit reaching back in time and recapturing the assets that were sold or money that was paid. These assets are brought back into the bankruptcy estate and distributed evenly among the creditors. Bankruptcy is not a time for injured creditors to be passive. They must actively participate in the process in order to be protected.We are not the first to face this economic problem, nor will we be the last. Even some of the founding fathers didn’t think much of financial institutions. Thomas Jefferson called banks “more dangerous than standing armies.” Andrew Jackson, told a delegation of bankers that they were a “den of vipers and thieves.” Thousands of years before the birth of Christ excessive charging of interest had been denounced. In the ancient world writers, philosophers, and political figures all noted its harm to society and the individual. Aristotle called the birth of money from money “unnatural.” Julius Caesar capped the interest of loaning money at 12 percent and Justinian dropped it to 8 percent.* God gave us this wisdom in the Bible: “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.” (Romans, Chapter 13, Verse 8.)
HISTORY and RELIGION and BANKRUPTCY: I also remind my clients that the Bible encourages forgiving debts and that those principals are the foundation for our bankruptcy laws. The theory of consumer protection has been around since the time of Moses – “Do not mistreat any widows or orphans. If you lend money to a poor person, do not charge any interest. Do not mistreat any foreigners among you. Leave part of your harvest in the fields for the poor to glean. Do not spread false rumors. Do not give false testimony in court. Make no false accusations. Do not accept bribes. If you take a poor man’s cloak as surety for a loan, give it back to him when he needs it to keep warm. If your enemy’s animal is running loose, return it safely to him.” Leviticus – “If a fellow Israelite living near you becomes poor and cannot support himself, charge no interest on any money you lend him and take no profit on any food you sell him.
I want thank Bishop Paul Peter Jesep, Ukrainian Autocephalous Orthodox Church – Sobornopravna of Europe and the Americas for his help on the theological history of usury and credit. To quote the Bishop “If credit card representatives told Jesus he had to pay 18 percent interest or more, he may have taken a whip of chords to show his disapproval. Because Jesus is not here in person to take action, it’s time Christian leaders use their political clout to drive out today’s moneychangers from the homes of families.” Catholic Reflections & Reports. His Grace is based in New England. In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into “debt slavery”, until the creditor recouped losses via their physical labor.
In the Torah, or Old Testament, every seventh year is a Sabbatical year wherein the release of all debts that are owed by members of the community is mandated, but not of “foreigners”. But every 49th year, the Year of Jubilee, the release of all debts is mandated, for fellow community members and foreigners alike, and the release of all debt-slaves is also mandated. The Year of Jubilee is announced by the blowing of trumpets throughout the land of Israel.
In Islamic teaching, according to the Quran, an insolvent person was deemed to be allowed time to be able to pay out his debt. “And if someone is in hardship, then let there be postponement until a time of ease. But if you give from your right as charity, then it is better for you, if you only knew.”
Philip II of Spain had to declare four state bankruptcies in 1557, 1560, 1575 and 1596. Spain became the first sovereign nation in history to declare bankruptcy.
In England, The first recognized piece of bankruptcy legislation was the Bankruptcy Act 1542. Bankrupts were seen as crooks, and the Act stated its aim to prevent “crafty debtors” escaping the realm.
– The Koran 2:276
If your debtor be in straits, grant him a delay until he can discharge his debts; but if you waive the sum as alms it will be better for you, if you but knew it. Believers, have fear of God and waive what is still due to you from usury, if your faith be true; or war shall be declared against you by God and His apostle. If you repent, you may retain your principle, suffering no loss and causing loss to none.” The Koran 2:276. More on religion and bankruptcy.
BIBLICAL REFERENCES: Jesus Christ didn’t suffer the greedy well. “And He found in the temple those who sold oxen and sheep and doves, and the money changers doing business. When He had made a whip of cords, He drove them all out of the temple, with the sheep and the oxen, and poured out the changers’ money and overturned the tables” (John 2:14-15).* Let’s not forget the Lord’s prayer: “…and forgive us our debts as we forgive our debtors” Jewish law provides for cancellation of the debts of brethren every 7 years (Deut. 15: 1-2, NIV) and, on the 50th year (jubilee) “shall proclaim liberty throughout the land, too all its inhabitants” (Lev. 25:10, NIV). The Jewish lawmakers knew that keeping people under heavy debt forever would only hurt their overall economy. As a result of these basic principals their economy stayed healthy and continued to grow.
