“Our asset-location firm has identified unclaimed funds being held in your name by a government agency.”
The letters in your mailbox won't tell you this straight: if your home sold at auction for more than you owed, the leftover money belongs to you.
It's called the surplus, the overbid, or excess proceeds. With today's home values, it's often tens of thousands of dollars. And a whole industry is built on getting between you and it.
Days after the sale — sometimes before you even know money exists — the letter arrives:
"Our asset-location firm has identified unclaimed funds being held in your name by a government agency."
Notice what's missing: the amount, and where it's held. That's on purpose. One Colorado company's own paperwork "in the vast majority of instances" did "not disclose the total amount to which the owner is entitled." Yet its letters and website said the recovery would "cost the owner nothing."
Then comes the closer: "No upfront cost — we only get paid if you get paid."
After a foreclosure sale, the surplus list is a public record at the court clerk, public trustee, or county treasurer. Scammers pull it daily. It's a perfect lead list: people who just lost a home, are owed real money, and usually don't know it.
They reach you fast and stay vague. The pitch hides two facts: how much you're owed, and how easy it is to claim. Because here's the secret — claiming your own surplus is usually one simple form, filed with the agency holding the money, for free.
Then they get your signature. The "recovery agreement" takes a fat cut of your own money — the Colorado AG documented agreements taking 50% to 80% of the overbid. The more dangerous version is an assignment of rights or power of attorney. As one legal aid group puts it: "Once you sign that document, the scammer can file it with the court and claim your surplus funds." All of it.
The worst versions skip you entirely. Some crews forge signatures on claim documents. In Florida, fraudsters have even found strangers with the same name as the rightful owner, had the impostor sign, and split the stolen money. That fraud got so common that Florida courts began cracking down in 2025. At least one county now requires the real former owner to testify in person before honoring an assignment.
A widow in Cambria Heights, Queens, lost her home to foreclosure. The auction brought in nearly $400,000 more than the debt — her money, sitting with the government, waiting for her claim.
She never got the chance. According to the Queens District Attorney, three defendants schemed for years to grab that surplus using phony documents carrying the victims' forged signatures. In February 2016, prosecutors say, $350,000 was paid out — to the fraudsters.
According to the charges, the widow didn't learn of the theft until January 2021. That's when she finally went to claim her own surplus and found it long gone. The Queens DA charged the trio; the case is an accusation, not yet a conviction.
The lesson is speed and knowledge. If she had known the money was there and filed her free claim early, there would have been nothing left to steal.
This one has the cleanest defense in the whole scam world: go get your own money. It's free.
In Colorado, foreclosure sales run through your county's Public Trustee. After the sale, the Public Trustee holds the overbid for six months, notifies you, and pays you at no charge. There is never a fee to collect from the Public Trustee. After six months, the money moves to the State Treasurer's unclaimed property program. Claiming there is still free.
In Florida, the court clerk holds the surplus, and the law presumes the owner of record is entitled to it. You claim straight from the clerk. Florida law even requires any assignment paperwork to state, in writing, that "the owner does not need an attorney or other representative to recover surplus funds in a foreclosure." The scammers' own contracts must confess it.
Everywhere else, the playbook is the same. Call the clerk of court, trustee, or county treasurer that handled the sale. Ask two questions: "Is there a surplus from my sale?" and "What form do I file to claim it?" If the paperwork feels heavy, a HUD-approved housing counselor (free, 888-995-HOPE) or a legal aid office can walk you through it — still without giving anyone a cut.
And before the auction ever happens, you have stronger options. A complete application to your servicer for help can trigger a federal rule (12 CFR §1024.41) that pauses the foreclosure while you're reviewed. Our equity-stripping and cash-buyer guides cover the scams that circle before the sale; this one circles after.
Colorado: Colorado law blocks finder's fees on foreclosure overbids for a long stretch after the sale. Any finder's-fee pitch in roughly the first two and a half years is simply void. Pushing one can be a misdemeanor with jail time and a fine up to $10,000. Even after that window, the law limits what recovery agreements can charge. Your move: call your county Public Trustee directly. Free, always.
Arizona: After a trustee's sale, excess proceeds go to the county treasurer. You file an Application for Release of Excess Proceeds in superior court — Maricopa County publishes free self-service forms. Any recovery agreement signed within 30 days after the sale is void, and agreements must be written, signed, and notarized.
California: The sale trustee must notify everyone with a recorded interest and pay valid claims itself. If ownership is disputed, the funds go to the court for a judge to sort out. No third party is needed at any step.
Nevada: After a deed-of-trust sale, the remaining balance goes to the debtor by law; disputed funds go through the district court. For tax-sale excess proceeds, claim directly with the county treasurer — Clark County publishes instructions.
Florida: Surplus assignments are only valid with full written financial disclosure, the "you don't need a representative" statement, and total pay to the company capped at 12% of the surplus. Anyone asking for a third of your money wants nearly three times what Florida law allows.
This guide is educational information, not legal advice. For advice about your specific case, talk to a HUD-approved housing counselor (free) or a licensed attorney.
Sources:
Talk it through with me free for 30 minutes. No upfront fees — ever. That’s the law, and it’s how I work.
Book Your Free Call