What are Surplus Funds?

There are two ways a house can be auctioned off. First, the county can take the house and auction it off if you don’t pay property taxes. Second, if you fail to make your mortgage payments on time, the bank can foreclose on the house and put it up for sale. Surplus funds are when the home is sold for more than what was owed in taxes or what was owed to the lender. That money is then owed to the previous owner.