Most people don’t realize this, but Texas homeowners sometimes lose a property and still have money owed to them.
It sounds impossible, but it happens every day.
If your home was sold at foreclosure, tax sale, or HOA sale, you may be asking:
“Is there money left over from the sale?”
That leftover money is called surplus funds (also called excess proceeds). And in Texas, these funds may be sitting in a court registry or county account—waiting to be claimed.
This article explains:
- what surplus funds are,
- how to search for them in Texas,
- who can claim them,
- and why people lose out on this money (even when it’s rightfully theirs).
What Are Surplus Funds in Texas?
When a property is sold at a foreclosure or forced sale, the sale proceeds are applied in a specific order:
- Costs of sale
- The foreclosing party’s debt (mortgage, HOA lien, tax lien, etc.)
- Other lienholders (depending on the type of sale)
- Then the remainder goes to the former owner
That remainder is the surplus.
Example:
A home sells for $265,000 at foreclosure.
The mortgage payoff and fees total $210,000.
➡️ The remaining $55,000 may be surplus funds owed to the former homeowner.
When Do Surplus Funds Happen in Texas?
Surplus funds can happen after:
✅ Mortgage Foreclosure Sales
Texas is known for non-judicial foreclosures (fast foreclosures with minimal court involvement), but surplus can still occur.
✅ Tax Sales
Texas tax foreclosure sales can also produce surplus proceeds.
✅ HOA Foreclosures
HOA foreclosure sales sometimes create surplus—especially when the HOA lien is small compared to the property value.
Why People Miss Their Surplus Money
Many Texans never claim surplus funds because:
- they moved and never got notices
- they assume foreclosure means they get nothing
- they don’t know where the money is held
- they’re intimidated by the court process
- the funds get claimed by someone else (or delayed by competing claims)
Surplus funds can range from a few thousand dollars to tens of thousands—and sometimes more.
How to Find Surplus Funds in Texas (Step-by-Step)
Step 1: Identify the Type of Sale
Before searching, figure out what kind of sale it was:
- mortgage foreclosure?
- tax foreclosure?
- HOA foreclosure?
This matters because it affects where the surplus funds are deposited and how you claim them.
Step 2: Get the Property Address and Sale Date
You’ll need:
- property address
- county
- approximate foreclosure/tax sale date
- name of former owner (if different)
If you don’t have the sale date, don’t panic—an attorney can usually locate it through public records.
Step 3: Check the County Court Registry (If Applicable)
In some cases, surplus funds end up held by the court.
Depending on the sale type, the funds may be deposited with the:
- District Clerk
- County Clerk
- Justice Court
- Court registry / registry funds
A common phrase you’ll hear is:
“Funds in the registry of the court.”
That’s surplus money being held until a judge signs an order releasing it.
Step 4: Search for “Unclaimed Property” in Texas
Sometimes the funds don’t sit in the court registry forever. They can end up reported as unclaimed property.
Texas has an official unclaimed property system (run through the state comptroller) where you can search by name.
This is a key step because people often search only their county and miss money that has been transferred to the state.
Step 5: Review Liens and Competing Claims
This is where things get tricky.
Surplus funds don’t automatically go to the former homeowner if there are:
- junior lienholders
- judgment creditors
- child support liens
- IRS or other government claims
Some of these parties may file claims to the surplus proceeds.
Even if creditors are involved, you may still be entitled to some or all of the surplus. But the distribution must follow Texas law and may require court filings.
How Do You Claim Surplus Funds in Texas?
To claim surplus funds, you typically must:
1) File a claim / motion
Often called something like:
- Motion to Release Excess Proceeds
- Application for Excess Proceeds
- Petition for Release of Surplus Funds
2) Provide proof you’re entitled to the funds
This may include:
- deed or ownership documents
- foreclosure sale documents
- identification
- payoff statements
- lien records
3) Obtain a court order (in many cases)
If the funds are in a registry, a judge may need to sign an order directing release.
Who Can Claim Texas Surplus Funds?
Potential claimants include:
- the former homeowner
- heirs (if the owner passed away)
- lienholders / judgment creditors
- assignees (companies that buy surplus rights—be cautious)
If multiple parties claim the money, the court may require a hearing.
Watch Out for Surplus Fund Scams
After a foreclosure, people are often targeted by letters saying:
“We found money owed to you! Sign here and we’ll get it for you.”
Do not sign anything without understanding what you’re giving up and whether the company is even authorized to collect.
A reputable attorney can help you claim surplus funds.
How Long Do You Have to Claim Surplus Funds in Texas?
Deadlines can vary depending on:
- the type of sale
- where the funds are being held
- whether the money has been transferred to the state
Because time limits can apply, it’s smart to investigate quickly—especially if the sale happened within the last few years.
Bottom Line: You Might Be Owed Money
If you lost property in Texas through foreclosure, tax sale, or HOA sale, don’t assume it’s over.
You may still have a legal right to surplus funds—money that belongs to you.
Need Help Finding or Claiming Surplus Funds in Texas?
If you think you may be owed surplus funds, we can help you:
- locate the funds
- identify the correct county registry or agency
- confirm whether liens affect your claim
- file the proper claim paperwork
- pursue release of funds through the court
Don’t leave money on the table.
